“Logistics costs must be reduced to 9% of GDP”

India’s revolutionary digital infrastructure is primarily driving transformation in the logistics sector, enabling seamless operations and greater operational efficiencies. Experts believe that the country’s improved ranking in logistics performance is a step in the right direction and that the overall cost of logistics also needs to be reduced.

“We are pleased with India’s improved ranking in the World Bank’s Logistics Performance Index 2023, which is a testament to the country’s significant investments in logistics, infrastructure and technology. However, there is an opportunity for both the logistics player and the government to speed up the journey and reduce logistics costs to 9% of GDP. This requires both investment and close collaboration between government and the private sector,” said Anil G. Verma, Executive Director & CEO, Godrej & Boyce.

The government’s ambitious goal of a $5 trillion economy has led to a rise in customer expectations for faster deliveries and shorter lead times, experts said, adding that technology and automation offered by 3PL companies are helping companies do that too have to optimize the efficiency of the supply chain.

National Logistics Policy (NLP) initiatives such as the Unified Logistics Interface Platform and the System Improvement Group, to name a few, aim to further improve India’s logistics ecosystem and drive growth.

They believe that the government’s recent efforts to improve the logistics sectors through initiatives such as the Prime Minister’s National Master Plan for Multimodal Connectivity and the National Logistics Policy are poised to provide the necessary impetus

The government has already created a favorable environment for foreign direct investment in India.

The industry believes that the warehousing sector in India has constantly focused on adopting more environmentally friendly practices to meet global standards and drive collaboration with the manufacturing industry. While geopolitical tensions have disrupted international trade, India’s focus on infrastructure development has boosted manufacturing and exports, leading to progressive domestic growth.

However, for long-term growth and holistic development, warehousing still needs significant support and strategic investment.

“Implementing green storage practices requires significant capital investments to install energy-efficient technologies, special building designs, and green materials. Therefore, foreign investment is crucial to pave the way for the influx of the latest technology that can transform warehouse operations,” said Anshul Singhal, Managing Director of Welspun One Logistics Parks.

He added that the sector is highly dependent on technology to function properly, and foreign direct investment can bring advanced technologies and innovations from developed countries to promote green operations.

However, it is imperative that enterprise level organizations also ensure the integration of environmental initiatives, indicating their commitment to a greener economy. The government’s additional commitment to boosting green growth is commendable, with the latest budget earmarking a sizeable spend of Rs 35,000 crore to achieve energy transition and net zero targets and prioritize green growth.

Overall, the combined efforts of digital adoption and green practices will play a crucial role in fostering value-added collaborations with manufacturing industries that will drive sustainable development, Singhal said.

“The warehousing sector, which is a crucial part of the logistics ecosystem, will also see significant growth in the near future, with a projected value of INR 2,872.10 billion by 2027.

NDR Warehousing strives to improve operational efficiencies, work more closely with partners and leverage the latest digital tools to broaden our horizons,” Daljit Singh, Head of Business Development & CRM, NDR Warehousing.

Logistics companies in India are well positioned to build on this success and reach even greater heights in the future by renewing their focus on efficiency, innovation and customer satisfaction, Singh said.

He added that the significant growth comes with a range of environmental challenges, including increased energy use, waste generation and carbon emissions, which have become increasingly common as the industry continues to expand.

By adopting sustainable practices, companies increase brand equity and position themselves as
responsible and environmentally conscious. As India’s warehousing economy continues to grow, it is important that companies prioritize sustainability and actively seek innovative solutions that can help them achieve their business goals while protecting the planet for future generations, Singh added.

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