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Due to GST implementation, global players will now touch the Indian ground in the express logistics market: Bonafide Research
After the GST implementation, global players have started to view the Indian logistics industry as an extremely favourably one and thus have announced intentions to increase their capacity of transporting goods from/ to Indian markets. In the last few years, several large global companies have entered by the way of mergers or acquisitions or joint venture agreements. With the implementation of GST, global players have set their eyes on Indian market for expansion of their express logistics businesses. India express logistics sector is primarily categorized into four segments that include surface express, air express, rail parcel and Indian postal services. Surface express logistics contributes the maximum market share followed by air express and rail parcels. There is an unfavourable model mix in the Indian logistics sector that is skewed towards roads as a major mode of transportation, along with underutilization of other modes viz. rail, air and coastal shipping. Despite being insufficient mode, surface express has the highest time bounded shipments traffic share in India. Whereas railways being economic mode of time bounded shipments, transportation has lost the market share in India due to under investments leading to capacity constraints. Air express is an emerging category in India which is led by major players like Blue Dart and FedEx. Air express is the quickest possible way for time bound shipments in countries like India.
According to recently published report of Bonafide Research "India Express Logistics Market Outlook, 2027-28" express logistics market is anticipated to grow at more than 11.17% CAGR from 2023 to 2028, with e-commerce penetration, economy revival, GST implementation and government's initiative of 'Make in India'. The market is expected to grow with a CAGR of close to 15% in the next coming years. A well organized and mature logistics industry has the potential to leapfrog the 'Make in India' initiative to its desired position. Also, government of India has been taking various initiatives in order to develop road, rail and air infrastructure in the country. Major government projects like Sagar Mala and Bharat Mala will reduce the time duration of shipments in coming years due to better connectivity across country. However currently, the game changing event is the implementation of GST on 1st July 2017.
Sustainability is increasingly becoming a focus for the industry, with companies adopting eco-friendly practices such as the use of LNG-powered trucks and electric vehicles for last-mile delivery. This aligns with the broader global push toward greener supply chains and reduces the carbon footprint of logistics operations.
As online shopping continues to expand across various categories, including fashion, electronics, and groceries, the demand for swift, reliable deliveries to even the most remote parts of India is set to escalate. By FY2030, e-commerce-driven shipments alone are expected to contribute up to 15–16 billion parcels. A rapidly emerging segment within the express logistics market is quick commerce (Q-commerce), which focuses on ultra-fast delivery of essentials like groceries, food, and medicines, typically within an hour or less. Q-commerce platforms like Blinkit, Swiggy Instamart, and others have revolutionized urban delivery services, meeting the demands of an increasingly convenience-driven population that expects immediate access to products. As a result, express logistics companies are adapting by investing heavily in last-mile delivery infrastructure, including automated sorting hubs and AI-powered route optimization systems. Surface express logistics remains the largest segment in the market, with air express and rail parcels playing supporting roles. However, technological advancements are helping air express logistics become more viable for smaller shipments, while rail networks are being optimized for larger volumes of cargo. Investment in infrastructure development, such as the expansion of warehouses, advanced sorting systems, and automated logistics technology, is crucial to meeting the burgeoning demand for fast deliveries. The Indian government has also rolled out several initiatives, including the National Logistics Policy, aimed at streamlining the logistics sector, reducing costs, and improving the overall efficiency of transportation networks.
GST implementation has changed the scenario in India express logistics industry by replacing multiple taxes levied by central and state governments. The planned dual GST model (CGST+SGST) has replaced around 29 states and federal taxes and tariffs for a single tax at the point of sale. Hence, most of the current challenges of logistics industry will be a story of the past as the goods can now move freely inter-state without any levy. The taxation in express logistics will come down to 18-21% from almost 27%. Global players like UPS, XPO Logistics, J.B hunt, C.H Robinson etc. have already set their eyes on the Indian industry for investment and expansion of their businesses. This has opened the gate for new entrants in the express logistics market. GST implementation will benefit organised sector the most, in terms of consolidation and merging of small players with larger players to leverage the mutual benefits. The sector will also attract interest from global players through foreign direct investment, joint ventures or acquisitions.
According to recently published report of Bonafide Research "India Express Logistics Market Outlook, 2027-28" express logistics market is anticipated to grow at more than 11.17% CAGR from 2023 to 2028, with e-commerce penetration, economy revival, GST implementation and government's initiative of 'Make in India'. The market is expected to grow with a CAGR of close to 15% in the next coming years. A well organized and mature logistics industry has the potential to leapfrog the 'Make in India' initiative to its desired position. Also, government of India has been taking various initiatives in order to develop road, rail and air infrastructure in the country. Major government projects like Sagar Mala and Bharat Mala will reduce the time duration of shipments in coming years due to better connectivity across country. However currently, the game changing event is the implementation of GST on 1st July 2017.
Sustainability is increasingly becoming a focus for the industry, with companies adopting eco-friendly practices such as the use of LNG-powered trucks and electric vehicles for last-mile delivery. This aligns with the broader global push toward greener supply chains and reduces the carbon footprint of logistics operations.
As online shopping continues to expand across various categories, including fashion, electronics, and groceries, the demand for swift, reliable deliveries to even the most remote parts of India is set to escalate. By FY2030, e-commerce-driven shipments alone are expected to contribute up to 15–16 billion parcels. A rapidly emerging segment within the express logistics market is quick commerce (Q-commerce), which focuses on ultra-fast delivery of essentials like groceries, food, and medicines, typically within an hour or less. Q-commerce platforms like Blinkit, Swiggy Instamart, and others have revolutionized urban delivery services, meeting the demands of an increasingly convenience-driven population that expects immediate access to products. As a result, express logistics companies are adapting by investing heavily in last-mile delivery infrastructure, including automated sorting hubs and AI-powered route optimization systems. Surface express logistics remains the largest segment in the market, with air express and rail parcels playing supporting roles. However, technological advancements are helping air express logistics become more viable for smaller shipments, while rail networks are being optimized for larger volumes of cargo. Investment in infrastructure development, such as the expansion of warehouses, advanced sorting systems, and automated logistics technology, is crucial to meeting the burgeoning demand for fast deliveries. The Indian government has also rolled out several initiatives, including the National Logistics Policy, aimed at streamlining the logistics sector, reducing costs, and improving the overall efficiency of transportation networks.
GST implementation has changed the scenario in India express logistics industry by replacing multiple taxes levied by central and state governments. The planned dual GST model (CGST+SGST) has replaced around 29 states and federal taxes and tariffs for a single tax at the point of sale. Hence, most of the current challenges of logistics industry will be a story of the past as the goods can now move freely inter-state without any levy. The taxation in express logistics will come down to 18-21% from almost 27%. Global players like UPS, XPO Logistics, J.B hunt, C.H Robinson etc. have already set their eyes on the Indian industry for investment and expansion of their businesses. This has opened the gate for new entrants in the express logistics market. GST implementation will benefit organised sector the most, in terms of consolidation and merging of small players with larger players to leverage the mutual benefits. The sector will also attract interest from global players through foreign direct investment, joint ventures or acquisitions.
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