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DMS Lat 30° 6' 15.9444'' EM
Lon 1° 58' 14.0844'' S
INDIA:
THE NEXT
LOGISTICS
POWERHOUSE
34903 93409
“In our 2023 Trade in Transition report, 96% of respondents said that geopolitics is driving them to reconfigure trade operations,” says Sultan Ahmed Bin Sulayem, Group CEO of logistics giant DP World.
Already a manufacturing hub for sectors like textiles and pharmaceuticals – with stable global relations – India is expected to be a major beneficiary of this shift. These global trends, amplified by the government’s canny ‘Make in India’ strategy, are projected to more than double India’s manufacturing exports, from $418 billion in 2022 to $1 trillion in 2028, according to global consultancy Bain & Co.
The question is, how will all those exports get to where they need to go? The answer is with a wholesale transformation of India’s logistics infrastructure – one that is propelling it to become a world-class logistics powerhouse.
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As global manufacturing increasingly moves to India, the country is on a colossal mission to build the supporting logistics infrastructure.
In late 2022, production lines in Chennai began producing flagship iPhones, the first time they had manufactured the latest model. India currently accounts for 5% of Apple production, but that figure is projected to grow to 25% by 2025.
The move comes as businesses around the world look to both diversify their supply chains, and reconfigure them closer to market, responding to China’s pivot towards consumption-led growth, pandemic-era disruption, and reverberations from the conflict in Ukraine.
In our 2023 Trade in Transition report, 96% of respondents said that geopolitics is driving them to reconfigure trade operations”
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Expanding mega-capacity
While some of India’s manufacturing expansion is expected to cater to domestic demand, the primary driver is exports. By 2030, cargo volumes are expected to nearly double those of 2020.
In a bid to absorb this enormous expansion in freight, India’s Ministry of Ports, Shipping and Waterways has a pipeline of 81 public-private partnership (PPP) projects to be awarded by 2025.
One of the most eye-catching is a new multi-use mega-container terminal at Tuna Tekra on India’s north-west coast. Once completed, it will add 2.19 million TEUs (twenty-foot equivalent) per annum to India’s container capacity.
It will be built and operated by Dubai-based DP World’s which is the “market leader for coastal shipping in India, with more than 70% market share by tonnage and volume,” according to Rizwan Soomar, CEO and MD of DP World Indian Subcontinent and Sub Saharan Africa.
The company is further expanding its presence with three new “world-class free trade zones in Mumbai, Chennai and Cochin, which will offer a multitude of services to EXIM customers in India and international businesses exploring India as a trade hub,” says Soomar. The free trade zone in Mumbai is already operational.
Such services will include access to DP World’s temperature-controlled storage and distribution infrastructure, crucial for temperature-sensitive goods such as pharmaceuticals and fresh produce. Additionally, the Mumbai free trade zone is strategically connected to the Nhava Sheva Port and the upcoming Navi Mumbai International Airport, granting local businesses and MSMEs access to domestic and global markets.
But scaling India’s ports is just one aspect of a strategy to build a seamless freight network that connects the country.
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And this physical infrastructure will be integrated digitally, with the national Unified Logistics Interface Platform (ULIP), which coalesces 30 systems from seven ministries through more than 100 APIs into a single real-time system, “improving regulatory inter-operability, while bringing the entire multi-modal network onto a single digital dashboard to provide visibility to all stakeholders,” according to Soomar.
For example, the integration of the Freight Operation Information System with ULIP will provide real-time visibility of freight movement to cargo owners. In parallel, as Gati Shakti Terminals enhance cargo handling capabilities in stations, such integration will holistically reduce the cost of logistics for railway freight movement.
The system will inter-operate with private partners, too. Soomar says that “DP World is proud to be associated with the ULIP project, and share industry inputs for its development,” adding that DP World’s own logistics platform will link to the system, for full end-to-end visibility.
Crucially, India is also developing the skills required for increasingly digitalized sectors – AI, robotics, and the Internet of Things (IoT) are already becoming prevalent in manufacturing and logistics. Currently, 30 new Skill India International Centres are being established, with a focus on job-ready digital skills, including a DP World-partnered Logistics Skill Development Centre at Varanasi.
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Multi-modal integration
In the World Bank’s 2018 World Logistics Performance Index (the most recent edition), India ranked 44th in the world, an impressive ten-place jump from just four years earlier.
To further enhance the logistics and infrastructure ecosystem in the country, the interlocking of Gati Shakti ‘National Master Plan for Multi-Modal Connectivity’ and the National Logistics Policy (NLP) look to unify every aspect of the country’s logistics.
Large investments are going into railways and waterways, to create a lattice of cost- and carbon-efficient freight routes. This interlocking network will connect to 35 planned multi-modal hubs. For instance, the recently commissioned Jalna multi-modal logistics park, which will function as a dry port for the Marathwada region, will strategically link the Delhi-Mumbai Industrial Corridors with the Mumbai Nagpur Expressway. Not only will this enhance hinterland connectivity, but will simultaneously allow industries in sectors like automobile, agricultural, food processing and steel leverage on the Nhava Sheva port for exporting their products. This will be augmented by private infrastructure too – already one of the largest private rail freight operators in the country, DP World is expanding its capacity too.
improving regulatory inter-operability, while bringing the entire multi-modal network onto a single digital dashboard to provide visibility to all stakeholders”
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Birth of a logistics powerhouse
The global tides of industry are shifting in India’s favor, presenting enormous opportunities for the country’s manufacturing, and supporting logistics.
India is grasping the possibilities with both hands. By combining massive public investment with the expertise and resources of companies like DP World, there’s every reason to believe India’s ambitions will be realized – becoming a factory to the world, and a major global trading hub.
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