Transformations in Logistics Industry under NaMo-led BJP power

Yesterday marked the 2-year anniversary of NaMo-led BJP government in power. Over these two years, we have come across some of the major initiatives led by him like Make in India, Swachh Bharat Mission, Jan Dhan scheme among many, many others.

The Indian Logistics Industry has also seen many adjustments that are set to radically transform the industry as a whole. Let’s take a look at all the things that have happened and have been proposed in the past two years that will impact the Logistics Industry.

NMModi-01-01

  1. There are plans to build new roads (about 10,000kms) as well as upgrade the state highways to national highways of about 50,000kms. About 100kms a day would be built. All this would help us bring down trucking costs significantly.
  2. The trilateral highway connecting India, Myanmar and Thailand represents a healthy connectivity between India and Southeast Asian countries. The highway is projected to be completed by 2018.
  3. Importers have also received a boost because of announcement of new deferred customs duty payment for large importers.
  4. Manufacturing start-ups will have to pay 25% less tax as an initiative of Make in India. Also, they can apply for MAT, and not corporate tax for 3 out of 5 years.
  5. Ports are being planned for upgradation. About Rs.800 crores are provided for the initiative.
  6. The Service Tax rate has shot up to 15%, thanks to additional 0.5% Swachh Bharat Cess and Krishi Kalyan Cess each. It was 14% prior to these, when it was increased from 12.36%
  7. Sector is predicted to grow at 8.6% CAGR between 2015 and 2020, as compared to 9.7% CAGR between 2010 and 2014.
  8. E-Commerce growth will help the warehousing segment to growth by 6% or more in 2016.
  9. Proposed implementation of GST will help simplify tax structure and lower logistics costs over existing multi-layered tax system which is causing significant delays in road transportation sector.
  10. India’s exports are likely to see a growth when initiatives like Make in India, Digital India & Skills India are all aligned.
  11. The potential market growth for Logistics Service Providers (LSPs) in India is massive too. Indian Logistics industry, currently valued at US $300 billion, has key growth drivers like GST implementation, better infrastructure and e-commerce market growth are is set to bring in new LSPs in the coming years.

What other things have happened (or are proposed to happen) that we have missed apart from the above? Please let us know in the comments below.

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