The challenges in Indian Logistics sector – I

The challenges in Indian Logistics sector – I

Sep 18

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Infrastructure is one of the biggest challenges faced by the Indian logistics sector and has been a major deterrent to its growth. Infrastructural problems like bad road conditions, poor connectivity, inadequate air and sea port capacities and lack of development of modes of transports like railways and alternates like inland water transport and domestic aviation have been constant irritants. Due to the infrastructural bottlenecks costs per transaction in Indian logistics sector is very much high compared to those in the developed markets.

Transport of freight by road forms an important component of freight movements within India, with a large chunk of goods, over 65 percent, being moved by road. The poor infrastructure has severely crippled the smooth functioning of logistics operations. With narrow and congested highways, poor surface quality of roads and 40 percent of villages not having access to all-weather roads, the efficiency of the transport system is severely affected.

Pathetic road conditions combined with the fact that India is perhaps one of the least connected regions in the world constitute a major impediment. Poor connectivity via roads and railways to ports, warehouses and logistics hubs is major infrastructural bottleneck. Movement of goods within the country is fraught with delays and risks.

The bulk of Indian trade is carried by sea routes and the existing port infrastructure is insufficient to handle trade flows effectively. The current capacity at major ports is overstretched and their infrastructural upgrades are being made at very slowly pace. While Shanghai

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