Sustained growth

With so much happening in terms of infrastructure development and a
rapidly growing robust economy the Indian logistics sector is set to witness a
period of sustained growth in the coming years, writes Amit Maheshwari,
CEO and Founder of Softlink Global.

The logistics industry in India is expected to grow at 15-20 per cent a year to reach around $350 billion by 2015, from its current size ofaround $80 billion, according to Fitch Ratings. The report further adds that despite the recent economics lowdown in the quarter ending September 2011, the Indian logistics industry will sustain its growth momentum in the coming years.

The automotive, food processing and pharmaceuticals (estimated at over $20 billion and expected to grow to $40 billion by 2015, a compounded annual growth of nearly 14
per cent: McKinsey) and retail industries are set to experience a boost in their growth. With the Indian ecommerce market showing signs of maturity there is a renewed interest among leading players to invest in the warehousing segment in an effort to facilitate a smoother movement of the products or services. Warehouses are set to play a key role in the growth of the logistics industry. The role played by warehouses today, other than the conventional storing services, include valueadded services

like consolidation and breaking up of cargo, packaging, labelling, bar coding and reverse logistics etc. There is a huge gap the supply and demand of the storage space with a major part of the segment owned by the unorganised players.  According to KPMG, an additional 120 million sq feet of warehousing space is needed by 2012 to bridge this gap. The organised sector in India currently has a capacity of 80 million metric tonnes in warehouse space and is expected to grow at 35 to 40 per cent per annum. Private sector companies from the logistics industry are planning to invest approximately $500 million for the development of 45 million sq. ft of warehouse space. The introduction of FTWZ policy