Logistics is at the Brink of Transformation in India
Numerous small companies have long dominated logistics in India. But now, tech startups are transforming this conventionally-run Industry with their disruptive concepts and approaches. During Budget, Indian customs declared their plans to digitize its transactions completely and also utilize RFID technology to improve export logistics.
Such announcements, along with few other crucial developments
such as a substantial increase in the number of tech-focused startups and grant
of 'infrastructure' status to the logistics sector, have predicted 'Great News'
for the Indian logistics business.
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Ecommerce: Pushing the Transformation Ahead
Since the past few years, with eCommerce tapping the market
potential of the country, logistics has witnessed an escalating growth.
The growth story of online shopping during the last 5 years
is nothing short of a mermaid story. Together with its developing adoption,
eCommerce has amazingly supported the logistics sector's visions. It's additional
complemented with the execution of GST, which compacts the tax structure and smooth
movement of products.
Note: Acc. to Economic Survey 2017-18, the Indian logistics sector
is estimate to extent about $225 billion in 2020, growing at a CAGR of 10.5
percent, but now due to Covid 19 pandemic its remains relatively low.
Furthermore, this massive development is driven by a parallel
growth in demand by evolving e-commerce retailers based in Tier II and III
markets. Also, initiated by the upward indication of India in Ease of Doing
Business Index in the world, global corporates have entered the FMCG sector in
the Indian market.
Being blessed with a favorable regulatory environment, and
supported by the availability of striking infrastructure; Indian logistics
businesses (small and large inclusive) can now have easier access to drive the
technology-driven operational transformation.
Current Scenario of
Logistics
An important thing to be noted is the logistics industry in
India has witnessed increasing growth. The growth would, nevertheless,
successfully keep the price of logistics beyond the limelight. On the flip
side, the entire cost to GDP of the US logistics industry is around 9.5percent,
and of Germany is about 8%. Whereas, on the other hand, India's logistics price
accounts for approximately 14% of its GDP, i.e., around $309 billion.
These stats indicate that the cost of logistics in India is
high leading to uncompetitive exports and more expensive products. With GST
(Goods and Services Tax) on the horizon, it's expected to bring an economic
upswing to the country. A survey of the second half of last year i.e., 2020,
indicated that the logistics sector currently employs more than 8.35 million in
the country.
Note: The TeamLease Services biannual 'Employment Outlook'
report for the April-September 2019-20 predicted that the logistic Industry
would observe a rise of 3 percent adding 1.49 lakh jobs
As the findings of the report, as mentioned above, with
approximately 31,480 new employment opportunities, logistics companies in
Mumbai tops the list. Consequently, Mumbai emerges as the town with promising
opportunities for talents in the logistics sector.
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