Why I’m looking to India for next-generation logistics

Home to one-sixth of the world’s population and a global hub for steel, coal, and an abundance of minerals, India is a country simply bursting with potential.

Its sheer scale and varied topography present huge opportunities – particularly when it comes to moving cargo from A to B. From what I see, India’s landscape and magnitude are inspiring a future-focused approach to trade and logistics defined by agility, visibility, and reliability, which not only shapes how we elevate the movement of cargo within its borders – but for the rest of the world too.

India: Fast transforming into a logistics powerhouse

Currently, India’s logistics industry, which is valued at $250 billion, makes up 14.4% of the country’s annual GDP. By 2025, however, the sector’s value is set to grow by more than 10%, equating to $380 billion.

The reason for this is that India recognises the enormous value to be gained by investing in this vital sector. By putting in motion a forward-thinking logistics network, India is driving inclusive growth connecting communities across the country – making everything from basic commodities to vital healthcare more widely accessible. With a robust and reliable logistics network, India is taking advantage of its wealth of talent and resources – building confidence in foreign investors as a result.

In fact, it is this informed outlook that’s driving many of India’s recent government initiatives. In a bid to make India a $5 trillion economy, for example, the Prime Minister’s recently announced National Logistics Policy (NLP) will drive India’s logistics infrastructure to be even more efficient and promote ease of doing business, bring about efficiencies in the overall cost of logistics and further consolidate India’s position as the global manufacturing country of choice. The National Logistics Policy will also help in accelerating measures to enhance multimodal capabilities across the country – no matter how remote or complex. Rail, road, coastal shipping, and even drone technology are being explored to enable the hinterland movement of goods and overcome challenging terrains – something our specialist arm, DP World Logistics, is facilitating.

Developments driven by existing initiatives like SagarMala also include port modernisation along the country’s 4,671-mile coastline, creating jobs for coastal communities while increasing terminal efficiencies through port community systems that automate basic processes. The government’s efforts through PM Gati Shakti to further increase inter-ministerial coordination and focus on technology, meanwhile, will also drive faster turnaround on clearances and increase the speed of cargo movement. Streamlining in this way boosts capacity and cuts costs across the logistics chain, making trade more accessible to smaller and medium businesses.

By embracing digitalisation, India’s logistics industry is also quickly boosting its capacity for import and export while giving customers greater visibility, relying less on manual processes to manage cargo throughout its journey – vital safeguards against future disruption.

Already, this approach is showing results: a total of 366.4 million tonnes of cargo was handled in Q1 of FY23 between India’s major and non-major ports; an 11.3% increase from the cargo handled during the same period in 2019-2020. Through our newly revolutionised logistics network with facilities like the state-of-the-art Free Trade Warehousing Zone (Nhava Sheva, Mumbai) and one of the largest private rail services in the country, we are further improving the flow of goods from factory floor to customer door in hitherto diverse geographies within India, creating greater consumer audiences for companies while giving local businesses access to the global market.

Trendsetters

Another trend we’re seeing in India’s logistics transformation is the meteoric rise of warehousing – which, to me, indicates a long-term vision to increase inventory security while keeping costs down for the end consumer. For high-value sectors such as the automotive industry that has witnessed ongoing parts shortages, this could be a game-changer; investing in warehouses as well as supply chains diversifies the way in which trade flows, preparing industries like automotive and their goods against future disruption.

Through our partnership with the National Investment Infrastructure Fund (NIIF) of India, we have committed to invest $3 billion in the logistics and infrastructure sector in India. This includes $400 million to acquire Continental Warehousing Corp (Nhava Seva), which will ultimately contribute to the 11.5% growth rate we’re expecting to see in India’s warehousing sector by 2025.

Warehousing gives domestic and foreign businesses the option to stockpile goods – and often at discounted rates, which is an added incentive. Plus, as seen with our Grade A warehouse in Koka, Haryana, these vast storage units are also linked to multimodal facilities, meaning goods can be transported when needed and with ease. As well as improving supply chain efficiencies, our Koka warehouse offers efficiencies in logistics costs for Indian customers, while minimising energy consumption and carbon emissions, so trade is more accessible for growing businesses (and cleaner for the long-term health of our planet).

Such synchronicity in the supply chain is making goods flow more efficiently than ever before, which is a quality that benefits investors interested in the India opportunity and the excellent talent pool.

Replicate to innovate

India’s dedication to logistics innovation is transforming livelihoods for over 22 million people – and that number is only set to grow as the country becomes a leader in supply chain evolution. As a world-leading end-to-end logistics provider, we’re not just proud to be a part of India’s success in this sector – we're partnering with the Government through our network of local expertise and world-leading technology and facilities.

What’s more, at a time when it has never been more important to strengthen and future-proof supply chains, I am looking at India as a case in point for how we can implement this same success on a global scale.

Geopolitical instability across Europe and between America and China is keeping world trade in a state of flux post pandemic, driving many to seek security by shortening their supply chains in an act of nearshoring. Whether this becomes the norm, or we return to globalisation – where we collaborate across borders once again to share opportunities and benefits – the fact remains that our supply chains need to be more resilient, and more agile.

India’s medley of cultures, resources and topographies offer foundations we can apply almost anywhere else in the world. And when we’re seeing the huge advantages its logistics transformations are creating, why wouldn’t we leap at the opportunity to change what’s possible for everyone!