$107 bn Logistics Sector Pinning for Industry Status

Published: 22nd August 2014 06:00 AM  |   Last Updated: 21st August 2014 11:38 PM   |  A+A-

CHENNAI: The $107 billion logistics sector in the country is pining for industry status, without which, say sector representatives, profitable growth is very unlikely.

Speaking on the sidelines of a logistics conference conducted by the Confederation of Indian Industry, Joint Managing Director of TVS Sons R Dinesh stated that one of the biggest hurdles to the profitable growth of the sector is its current non-industry status.

“We are still being viewed as a manpower provider and nothing else. The fact is, logistics companies provide many more services and possess unique expertise. The biggest hurdle to profitable growth in the sector is that fact that we haven’t been granted industry status by the government,” he said. He also said that the sector was taking steps to reverse this and would be submitting several representations to the government regarding the issue.

Another challenge facing the sector is the low percentage of outsourcing to logistic companies in the country.

“Only 7% of the business is a result of outsourcing. A woeful comparison to the 30% global figure. Companies here still prefer to handle their own logistics,” he stated. Growth prospects for the sector though remain strong with a projected growth of 10% in 2014-15.


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