India’s supply chain and logistics sector, one of the largest globally and worth $215 billion growing at a CAGR of 10.5 per cent, faces several barriers to growth despite its criticality to the economy. An unbalanced logistics modal mix, high indirect costs, fragmented infrastructure and networks, and limited technology adoption has been hampering the sector’s growth.
To bridge the current competitiveness gap of $180 billion, India needs to reduce logistics cost from 14 per cent of GDP to 7 per cent, said Barnik Chitran Maitra, Managing Partner of the management consultancy firm Arthur D Little India and South Asia and lead author of a report ‘Reimagining India’s supply chain: A bold vision for 2030’. The report by the firm and the Confederation of India Industry highlights the need for immediate attention given the high logistics cost of 14 per cent of GDP in India compared to 8-10 per cent of GDP in the US and Europe.
