India’s logistics sector has been shaped by significant growth and positive developments over the years. The sector is estimated to be valued at more than $320 billion in 2025, recording a CAGR of over 10 per cent from around $215 billion in 2021. It currently functions as the backbone of trade and commerce, supporting the overall growth of the economy. This growth has been largely driven by rising consumer demand, the rapid growth of e-commerce and quick commerce and policy support.
Technology integration in the sector has enhanced operational efficiency and improved performance, while storage and transportation infrastructure development has led to expansion. Together, these factors are expected to drive the sector’s growth in the coming years.
Changing modal mix
The modal movement of freight has been skewed towards roads and railways for decades. In recent years, roads have accounted for the highest share of almost 70 per cent, with railways holding a little over 20 per cent. While roads serve as the crucial link for last- mile deliveries, facilitating door-to-door services, the segment is characterised by high costs and emissions, especially for long-haul movement. To address these challenges, efforts are under way to increase the share of alternative modes, with the share of road transport expected to decline to below 50 per cent by 2030.
This shift is expected to largely favour railways. In comparison to roads, the cost of transport via railways is almost half with a notably lower negative impact on the environment. Since 2014, an additional 2,672 million tonnes (mt) of freight has been shifted to rail, resulting in 143.3 mt of carbon emission savings. The government aims to raise the share of railways in the overall freight mix to around 45 per cent by 2030, supported by initiatives such as the Coal Logistics Plan. Moreover, the development of dedicated freight corridors, and the growing trend of industries shifting their freight to railways and railway economic corridors are helping achieve this target. A total of 306 Gati Shakti cargo terminals have been approved, of which 118 facilities with a combined handling capacity of around 192 million tonnes per annum (mtpa) have been commissioned.
Apart from this, freight movement through inland waterways has gained traction. During 2024-25, cargo movement stood at a record 145.5 mt, over 9 per cent higher than in 2023-24, and registering a CAGR of more than 20 per cent from 2013-14. As of July 2025, cargo operations are being carried out at 26 of the 29 operational national waterways. Looking ahead, inland waterways are expected to handle more than 200 million metric tonnes (mmt) by 2030, and more than 500 mmt by 2047 under the Maritime Amrit Kaal Vision. This has also been promoted through schemes such as Jalvahak, along with favourable regulatory measures such as tax reforms.
Storage and allied infrastructure
Rising manufacturing output has created a continued demand for warehousing and storage spaces. On the industrial front, industry reports indicate that Grades A and B warehousing stock across the top eight cities, Delhi-NCR, Mumbai, Pune, Bengaluru, Chennai, Kolkata, Hyderabad and Ahmedabad, stood at over 438 million square feet as of 2024. This was led by Grade A facilities, at over 238 million square feet. Moreover, total warehousing stock in emerging Tier 2 and Tier 3 cities stood at 95 million square feet. Looking ahead, the top eight cities are projected to have a stock of around 700 million square feet by 2028.
A recent trend has been the rising demand for warehousing facilities in non-metro and Tier 2 and Tier 3 cities. These regions are witnessing the expansion of production chains along with increasing consumer demand. Warehouses and fulfilment centres are being set up in these areas to address this demand.
Notable efforts have also been undertaken to strengthen storage facilities for agricultural produce, with an emphasis on food security. As of November 1, 2025, the total covered, and covered and plinth (CAP) central pool storage capacity available with the Food Corporation of India (FCI) and state government agencies for foodgrain storage stood at around 92 mmt, of which around 48 mmt is with FCI and around 43 mmt with state agencies, including state warehousing corporations. Further, FCI operates 2,544 owned and hired storage units, with around 60 per cent of these concentrated in the northern zone. The Central Warehousing Corporation operates 741 warehouses as of August 31, 2025, featuring a capacity of 14.9 mt. In addition, the total number of cold storage facilities stood at over 8,810 as of September 2025.
Silo storage facilities have also gained traction for handling grains, given their lower land footprint. As of December 2025, the total operational steel silo capacity stood at over 2.9 mt. Of this, 0.55 mt is operational under the circuit model, while 2.03 mt is functional under the railway siding and road-fed model, with another 0.4 mt under construction. Moreover, the Department of Food and Public Distribution is implementing hub-and-spoke model silos, where hub silos have rail connectivity while spoke silos are road-linked. Under Phase I of this initiative, 0.38 mt has been completed and 3.11 mt is under construction.
Along with storage facilities, allied logistics infrastructure plays a crucial role in facilitating storage and transportation of commodities. Multimodal logistics parks (MMLPs) are envisioned as efficient hubs for intermodal connectivity, cargo consolidation and integration. The Ministry of Road Transport and Highways has awarded six MMLPs, at Bengaluru, Chennai, Indore, Jalna, Jogighopa and Nagpur. These are at various stages of development, with operations at Nagpur having commenced in 2025. Further, sites at Anantapur, Nashik and Pune are currently under bidding, with various others set to come up. MMLPs are also being planned and developed by the Container Corporation of India. Further, private players are investing in strategically located logistics and industrial parks with state-of-the-art facilities and improved modal connectivity.
Supply chain services
The movement of commodities from production hubs to end-consumers passes through various stages of the supply chain, including packaging, storage, transportation and last- mile delivery. With rising production volumes and supply chain complexities, companies are increasingly relying on third-party logistics (3PL) and 4PL service providers for managing various processes, ranging from storage and transportation to reverse logistics, automation and end-to-end solutions. With notable technical expertise, these players help enhance operational efficiency, reduce costs and enhance visibility across operations.
Moreover, in recent years, the logistics sector has been characterised by strong growth in the express logistics segment, driven by rising consumer demand for faster services and the expansion of e-commerce. As per industry reports, the express logistics industry in India was valued at around $9 billion as of FY 2025, with the domestic express segment at over $6 billion. The sector is expected to grow at a CAGR of around 19 per cent until FY 2030, reaching a market size of around $22 billion.
Focus on technology and sustainability
A key trend shaping supply chain services is the integration of technologies and the digitalisation of processes. Warehouse operations have been enhanced through inventory management systems, automated processes and the use of robots to minimise manpower requirements. These facilities are also being built to cater to future expansion requirements. On the transportation and last-mile delivery side, optimised routing has helped reduce delivery time and optimise fuel utilisation. Going forward, the sector is expected to witness the integration of advanced technologies, including artificial intelligence (AI), as the focus shifts towards enhancing efficiency.
In line with net zero goals, notable initiatives are being implemented to reduce the carbon footprint. Warehouses are increasingly using renewable energy to power operations, deploying energy-efficient equipment and enhancing daylight utilisation. Electric vehicles (EVs) have gained significant traction in the transportation segment, particularly for last-mile deliveries. The adoption of EV and LNG-powered trucks is also on the rise.
Sector outlook
While logistics operations function at the national level, a stronger regional focus has emerged as a critical driver of the sector’s overall progress. State-level logistics policies and city logistics plans are helping address region-specific issues while also identifying opportunities aligned with the region’s economy. Initiatives such as the Logistics Ease Across Different States (LEADS) index assess the logistics performance of states and union territories (UTs). It incorporates both perception-based inputs and objective data, covering key metrics including regulatory and institutional support, logistics services, etc. Meanwhile, the Strengthening Multimodal and Integrated Logistics Ecosystem (SMILE) programme has been launched by the Department for Promotion of Industry and Internal Trade in collaboration with the Asian Development Bank, beginning with a pilot for eight cities in eight states.
Looking ahead, the sector is expected to register a CAGR of over 10 per cent and reach a market value of over $520 billion by 2030. Increased emphasis is also being placed on reducing logistics costs to below 10 per cent of GDP. Further, AI and automation are expected to transform the sector. Ensuring that growth in manufacturing is complemented by adequate development of allied storage infrastructure and multimodal integration will be critical to achieving these targets.
