The Logistics sector in India has grown tremendously in recent years, with the influx of foreign investment and various policy changes. The industry is set to gain even more momentum in the future. However, as with most industries, if you want to succeed, you must know how to navigate the complex regulatory landscape. Here are some critical points you need to keep in mind.

Infrastructural Improvements

The logistics industry in India has been growing at a rapid pace in recent years. Various policy changes and infrastructure improvements have helped the sector grow. However, the logistics industry faces several challenges. Get the best information about “Logistics Cost Meaning” from Genex Logistics.

The transportation infrastructure in India still faces capacity constraints. This directly affects competitiveness. In addition, there are delays and inefficient turnaround times at ports. Adding more capacity will require careful management.

One of the biggest challenges for future infrastructure development is the execution of large capex projects. There are significant lead times for projects, and completing them on time can take time and effort.

Land acquisition issues can also pose a problem. If not appropriately addressed, they can cause cost overruns and delays.

Several policy changes are being implemented to make the logistics sector more efficient. A key example is the introduction of the e-way bill system. It is an electronic waybill that is used for the transportation of goods over a specific value.

Another significant policy change is the introduction of Goods and Services Tax (GST). This tax is designed to simplify the movement of goods. Among other things, it has eliminated multiple indirect taxes levied by different state governments.

Logistics is a critical component of any supply chain. The goal is to meet customer needs promptly. As such, it is necessary to have a reliable national infrastructure.

India is investing US$1.5 trillion over the next five to ten years to address the infrastructure deficit. S&P Global Ratings estimates that the credit impact of this investment is positive.

Ultimately, the Indian logistics sector is expected to continue growing. Policies and infrastructure developments will play a vital role in its growth.

Regulatory reforms

The logistics industry in India has undergone a series of policy and legislative reforms in recent years. These reforms are boosting the sector’s growth. The industry is expected to grow at a CAGR of 10 to 12 percent to reach $380 billion by FY25.

One of the most significant changes has been implementation of the Goods and Services Tax (GST). This is the first time multiple indirect taxes levied by the different state governments have been rolled into a single tax. It has helped streamline the movement of goods across the country and reduced the paperwork involved.

Another significant change has been the introduction of the e-way bill system. This is a digital waybill used by businesses to track the transport of goods over Rs 50,000.

Some of the other significant changes include the Sagarmala program, which is intended to improve the performance of the Indian logistics industry. It also provides for the construction of supporting infrastructure to boost connectivity.

The Government has launched several policies and infrastructure initiatives, which are likely to help the sector move forward. For instance, the PM Gati Shakti National Master Plan will improve multimodal connectivity and lower the costs of logistics.

In addition to these initiatives, the Indian logistics sector is fuelled by various other factors. For example, the Make in India program has contributed to the industry’s growth. 

Moreover, infrastructural improvements are making the industry more efficient.

Overall, these reforms have made the Indian logistics sector one of the fastest-growing sectors in the country. They have also led to several new logistics companies emerging on the scene.

GST

Logistics is a significant part of the Indian economy. It plays a crucial role in transporting goods from origin to consumption. The sector is expected to grow at a CAGR of 10 to 12 percent to $380 billion by FY25. However, the industry faces challenges.

One of the significant challenges faced by the industry is the cost of logistics. While the Government aims to reduce the tax burden on the sector, many small and medium enterprises still rely on tax professionals services. In addition, the industry is impacted by trade protections. This will require the Government to strengthen infrastructure in the sector.

A comprehensive logistics policy will also help reduce inefficiencies and improve global competitiveness. Moreover, a thorough analysis of new supply chain models can be beneficial.

Logistics is a critical component of the manufacturing sector. As such, the Government should make sure that there are no loopholes that could impact the industry.

The Government of India has introduced the National Logistics Policy. This nationwide mechanism aims to promote the smooth movement of goods across the country. It is expected to benefit the entire logistics sector.

A comprehensive logistics policy would help reduce the costs of transporting goods and streamline the industry. This will benefit the economy and enhance the competitiveness of the sector.

In the past two years, the logistics industry has experienced rapid progress. Several procedural changes and initiatives have been implemented in different sectors. These changes have improved the efficiency of the industry.

Among the most prominent initiatives introduced is the unified GST market. The new tax reform has increased the overall efficiency of the sector. Since there is a single registrant window, transit time and costs have been reduced.

COVID-19

COVID-19 has had an immense impact on the logistics industry. The logistics industry in India contributes around $200 billion to the nation’s economy. It is the largest industry in the country and serves many people.

Logistics has been a significant problem for the country’s economy in the past few years. During the COVID-19 outbreak, the country’s transportation sector was strained due to decreased demand. This created a bottleneck in transportation, reducing the supply of goods to market.

Despite the challenges, the logistics industry in India has been able to grow. In a recent report, the McKinsey Global Institute predicted that the sector would have a 10.3 percent growth in 2019.

The logistics industry in India is made up of a mixture of organized and unorganized players. However, the industry’s performance has improved significantly over the past few years.

One of the most significant transformations is the use of technology in the sourcing of business. Companies are increasingly adopting partnerships and innovative technologies to improve operational efficiency.

Technology can also be utilized to improve the digitization of the Indian trucking industry. Many truckers depend on intermediaries to procure loads. By going digital, they can increase the speed and efficiency of the supply chain.

A digital platform is also a must-have for marketing and selling transportation services. Using digital solutions, shoppers can post loads on a portal and choose from available options.

Another way of enhancing the Indian logistics industry’s capabilities is by creating a robust infrastructure. The rapid pace of infrastructure development is a significant factor in improving the logistics industry in the country.

Increasing the efficiency of the logistics industry can be achieved by increasing the volume of transported goods. To achieve this, governments should encourage rail transport. Also, it is necessary to develop structural reforms to streamline logistics and make it more formal.

New Warehouse Policy

The New Warehouse Policy is a Public Private Partnership (PPP) initiative launched by the Government of India to address the challenges in the warehousing industry. The policy focuses on logistics cost reduction and the development of exclusive warehousing zones.

The policy aims to increase the efficiency of the supply chain, create a trusted logistic ecosystem and encourage enterprise and value addition. It is an integrated, technologically enabled approach to improve the competitiveness of the Indian logistics sector. 

Moreover, it is expected to help India achieve global standards in the logistics domain.

The National Logistics Policy is expected to boost the country’s economic growth. It will also facilitate India’s entry into global value chains and enhance the ease of business. Besides, it will help to reduce logistics costs to single digits and support technology platforms. To get the best logistics and supply chain services in India can visit “Genex Logisolutions Pvt. Ltd.“

Considering the importance of logistics, the Government has been implementing several policies. These include launching the National Waterway and dedicated freight corridors to reduce dependence on road transport. In addition, the Government has planned to build 35 multimodal logistics parks and 40 air cargo terminals.

However, the prevailing problems in the logistics sector still hamper progress. For example, non-standardization in the industry hinders the adoption of new technologies. Furthermore, low margins prevent investments in scale-up operations. Hence, the Government is planning to enhance the skill sets in the logistics sector.

The National Logistics Policy will make India globally competitive and encourage enterprises and value addition. It will help to bring down the overall logistics cost to around eight percent of GDP by 2030. This will enable Indian goods to compete in the domestic market.

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