India Freight and Logistics Market SIZE & SHARE ANALYSIS - GROWTH TRENDS & FORECASTS UP TO 2030

India Freight and Logistics Market Analysis

The India Freight and Logistics Market size is estimated at 349.4 billion USD in 2025, and is expected to reach 545.6 billion USD by 2030, growing at a CAGR of 9.32% during the forecast period (2025-2030).

India's freight and logistics sector is undergoing significant transformation driven by substantial infrastructure investments and modernization initiatives. The Airports Authority of India and private operators are jointly investing USD 11 billion until 2025 to develop smaller, underserved, and remote airports across the country. Currently, India operates 400 regional routes with an additional 600 in the pipeline, connecting to 156 airports. The government's commitment to infrastructure development is further evidenced by the expansion of National Highways, which reached 145,155 kilometers by March 2023. This comprehensive infrastructure push aims to enhance connectivity and optimize logistics operations across the country, contributing to the growth of the logistics industry.

The industry is witnessing a notable shift towards sustainable and efficient transportation solutions. In July 2023, fifteen prominent companies collaborated under the Zero Emission Vehicles Emerging Markets Initiative (ZEV-EMI) and the government's E-FAST program, marking a significant step towards green logistics. This initiative is expected to drive the adoption of electric trucks, with projections indicating demand will exceed 5,000 units by 2027 and reach approximately 7,700 by 2030. The transition to sustainable transport solutions is becoming increasingly critical as operational costs continue to evolve, with the National Highway Authority of India implementing a toll fee hike of up to 7% nationwide in April 2023, impacting the cost of logistics in India.

The maritime sector is experiencing substantial growth and modernization, with the government identifying investment opportunities worth USD 120.84 billion in 2023. These investments are expected to generate employment for over 1.5 million individuals and facilitate the adoption of carbon-neutral alternatives at major ports. The government's emphasis on developing 5,000 kilometers of multi-country waterways demonstrates its commitment to diversifying transportation modes and enhancing maritime connectivity. The sector's transformation includes the promotion of battery-powered vehicles and equipment at primary ports, signaling a shift towards sustainable port operations, further driving the growth of the logistics industry.

The logistics landscape is being reshaped by policy reforms and technological advancements. The Interim Budget 2024 has placed special emphasis on enhancing supply chain efficiency through the PM Gati Shakti initiative, with an 11.1% increase in infrastructure allocation. This initiative aims to create a more integrated and efficient logistics network by improving coordination between different modes of transport. The government's focus on developing multimodal logistics parks and implementing digital solutions for supply chain visibility is creating a more streamlined and technology-driven logistics ecosystem. These developments are complemented by the introduction of state-of-the-art facilities and the adoption of automation across various logistics operations, significantly impacting the logistics sector in India.

India Freight and Logistics Market Trends

Government and private investments, rising exports, and the increasing interstate movement of goods are the major drivers of the transportation industry

• In 2024, the government is dedicated to reducing logistics costs to 5-6%. Indian Railways is taking steps to boost freight capacity, increase the speed of freight trains, lower freight expenses, establish dedicated freight corridors, improve last-mile connectivity between railheads, roads, and ports. They're aligning with PM Gati Shakti, granting industry status to logistics, promoting digital solutions, and developing logistics infrastructure. These efforts aim to cut costs and spur GDP growth in logistics.
• The sector is expected to grow till 2027 and is expected to add 10 million jobs by 2027. India is aiming to become a global hub for manufacturing and logistics, with recent policies attracting around USD 10 billion USD in investments for the warehousing and logistics sector. Also India's infrastructure plans for 2024, such as the Mumbai Trans Harbour Link (MTHL), Navi Mumbai International Airport, Noida International Airport and Western Dedicated Freight Corridor etc, are expected to accelerate India's journey towards becoming a prominent player in the global logistics landscape.

The diesel price increase was less sharp than the increase in petrol prices due to VAT cuts offered by several state governments

• In September 2023, oil prices hit a 10-month high of USD 90 per barrel as Saudi Arabia and Russia extended their voluntary production and export cuts till 2023. As India imports 85% of its oil, the fuel prices were impacted. According to the All-India Motor Transport Congress, which represents 14 million truckers and vehicle operators, the soaring fuel prices are impacting India's truckers as they have limited ability to pass on the rising prices, which account for 70% of the cost of operating a truck.
• The Indian government is contemplating reducing petrol and diesel prices by INR 4 - INR 6 (USD 0.04 - USD 0.07) per litre in 2024, timed with the upcoming Lok Sabha elections in H1 2024. Discussion in ongoing with Oil Marketing Companies to share the burden of this reduction equally, and there's a possibility of a more substantial cut of up to Rs 10 (USD 0.12) per litre. This move aims to alleviate the financial strain on the public and could also help lower retail inflation, which peaked at 5.55% in November 2023.

OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT

• India surpassed China to become the most populous country in the world in 2023
• Indian automotive industry aims to quintuple its vehicle exports by 2026
• Growing construction and agricultural goods demand supported by growing population and investments
• Economic and supply shocks from the Ukraine-Russia War disrupted supply chains leading to an increase in costs
• The Indian e-commerce market is expected to become the second-largest worldwide by 2034
• The manufacturing industry of India is expected to reach USD 1 trillion by 2025
• India's export target for goods and services is anticipated to reach USD 2 trillion by 2030
• Natural gas imports in India might double by 2030 amid rising domestic demand
• Surge in truck freight rates in metros in early 2024 due to regulatory changes and supply chain issues
• Rising product launches owing to BS-VI emission standards are increasing the sales of commercial vehicles
• India's rank rose six places to 38 in LPI 2023, fueled by strategic policies and infrastructure advancements
• The Indian government’s budget allocation worth USD 631 million is driving initiatives to subsidize and promote the adoption of electric vehicles
• Land transportation contributed more than 90% of freight transportation in 2022, supported by increased government investment and foreign FDI
• Increased capacity expected due to clearance processes simplification, and rising imports and oil consumption
• India is aiming to enhance maritime connectivity, with a focus on the ports of Mundra, Nhava Sheva, and Pipavav
• India has planned to invest USD 82 billion in increasing the cargo handling capacity of the ports to over 3300 M tons per year
• Rising developments in road length and railway infrastructure investments are boosting freight pricing in India
• Road freight volumes are driving the demand for freight services in India, supported by the USD 33 billion investment in road infrastructure
• Growing focus on infrastructure investment by government agencies such as NHAI and MoRTH are driving economic growth

Segment Analysis: End User Industry

Wholesale and Retail Trade Segment in India Freight and Logistics Market

The wholesale and retail trade segment dominates the India freight and logistics market, commanding approximately 33% logistics market share in 2024. This significant share is driven by the rising middle-class population, which has spurred a surge in retail consumption. The Indian retail market has emerged as a vibrant and rapidly evolving industry, with the food and grocery retail segment, encompassing staples, beverages, snacks, and packaged foods, accounting for over 55% of India's total retail sales. The segment's growth is further supported by government initiatives like the national retail trade policy aimed at boosting the ease of doing business for traders. Additionally, the e-retail market's expansion and the increasing number of online shoppers, projected to surpass 300-350 million by 2025, continue to drive demand for logistics services in this segment.

Manufacturing Segment in India Freight and Logistics Market

The manufacturing segment is projected to exhibit the highest growth rate of approximately 10% during 2024-2029, driven by India's emergence as a global manufacturing hub. The automotive industry, serving as a barometer for the nation's economic health, has witnessed significant expansion with India standing as the world's third-largest car market. The country's car exports surged to 671,384 units in 2023, marking a 4% year-over-year increase. The government's Production Linked Incentive (PLI) scheme has been instrumental in attracting foreign investments and boosting manufacturing exports. Furthermore, the pharmaceutical sector's growth, coupled with electronics manufacturing initiatives and the push for indigenous production under the Make in India program, continues to drive the demand for sophisticated freight logistics market solutions in this segment.

Remaining Segments in End User Industry

The other significant segments in the market include construction, agriculture, fishing and forestry, oil and gas, mining and quarrying, and various other industries. The construction segment benefits from extensive infrastructure development projects and government initiatives like the National Infrastructure Pipeline. The agriculture segment maintains its importance due to India's position as a major agricultural producer and exporter. The oil and gas, mining, and quarrying segment, though smaller in market share, plays a crucial role in specialized logistics services. These segments collectively contribute to the diverse nature of India's freight and logistics market, each requiring specialized handling, storage, and transportation solutions tailored to their unique requirements and regulatory compliance needs.

Segment Analysis: Logistics Function

Freight Transport Segment in India Freight and Logistics Market

The freight transport services segment has emerged as the dominant force in India's freight and logistics market, commanding approximately 51% logistics market share in 2024. This segment's prominence is driven by significant infrastructure developments across road, rail, air, and maritime transport modes. The government's focused investments in transportation infrastructure, including the development of dedicated freight corridors, expansion of national highways, and modernization of ports, have strengthened this segment's position. The segment has particularly benefited from the implementation of the National Infrastructure Pipeline (NIP) and PM Gati Shakti initiatives, which have enhanced multi-modal connectivity. Additionally, the increasing adoption of digital technologies for route optimization, real-time tracking, and fleet management has improved operational efficiencies in freight transport services.

Warehousing and Storage Segment in India Freight and Logistics Market

The warehousing and storage segment has demonstrated remarkable growth potential in India's logistics landscape. The segment's expansion is primarily driven by the booming e-commerce sector, increasing adoption of third-party logistics services, and the implementation of the national logistics policy. The development of Grade-A warehousing facilities, particularly in tier-II and tier-III cities, has accelerated this growth. The segment has witnessed significant technological advancements, including the integration of automation, robotics, and warehouse management systems. The government's emphasis on developing multi-modal logistics parks and the increasing demand for specialized storage solutions, including cold chain facilities, have further catalyzed the segment's growth trajectory.

Remaining Segments in Logistics Function

The other significant segments in India's freight and logistics market include freight forwarding market size services, Courier, Express, and Parcel (CEP) services, and other logistics services. The CEP segment has gained substantial traction due to the rapid growth of e-commerce and increasing consumer expectations for faster deliveries. The freight forwarding segment plays a crucial role in international trade logistics, offering end-to-end solutions for cross-border shipments. The other services segment encompasses value-added services such as customs clearance, packaging, and supply chain consulting, which are becoming increasingly important as businesses seek integrated logistics solutions. These segments collectively contribute to the market's dynamism and are evolving with technological advancements and changing customer requirements.