Indian logistics market to grow at 8-9 percent CAGR, reaching INR 13.4 trillion by FY28, per Motilal Oswal report.

The Indian logistics market, valued at INR 9 trillion in FY23, is expected to reach INR 13.4 trillion by FY28, growing at a CAGR of 8-9 percent, according to a report by Motilal Oswal. This surge is attributed to technological advancements, structural shifts, and government-led initiatives aimed at improving infrastructure and reducing logistics costs.

Key developments include the National Logistics Policy, launched in 2022, which promotes rail freight via dedicated freight corridors (DFCs). The DFCs, 96 percent complete as of April 2024, are expected to boost rail transport’s share from the current 18 percent.

India’s logistics costs, at 14 percent of GDP, remain high compared to the 8-9 percent in developed nations. However, with ongoing investments in road, rail, and waterways infrastructure, the cost-to-GDP ratio is projected to align with global standards.

The domestic express logistics sector is expected to grow at a 14 percent CAGR, fueled by e-commerce expansion.