Date : October 14, 2022
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Positive impact of GST on logistics & warehousing industry will boost up the demand for forklifts in India: Bonafide Research

Positive impact of GST on logistics & warehousing industry will boost up the demand for forklifts in India: Bonafide Research

Government initiatives in the infrastructure development of ports, airports and manufacturing industries have raised the demand of material handling equipment's in India. On other hand, major logistic players have announced the development of more than 50 logistic parks in India for parcel storage and distribution, which is an added advantage to the forklift industry.

With the help of 'Make in India' drive, India is on the path of becoming the hub for hi-tech manufacturing plants. Global players have either set up their plant or are in process of setting up manufacturing plants in India. The forklift industry is expecting to see a good growth in manufacturing and consequently in logistics and distribution activities for the next few years. This manufacturing initiative has added advantages for forklift industry. The key markets like Ports, CFS and warehouses are generating demand for forklifts, pallet trucks, stackers, order pickers truck etc. Cargo traffic handled by India's major ports & CFS increased more than 5% Y-O-Y. The need for material handling equipment is directly related to the amount of cargo and freight traffic. India will see a major pull in the demand for these forklift equipment's in future.

According to recently published report of Bonafide Research "India Forklift Market Overview, 2022-28", overall market is anticipated to grow with CAGR of more than 18% during the forecast period. The market is further expected to blossom with the implementation of GST in India. The GST Act was passed in the Lok Sabha on 29th March, 2017, and came into effect from 1st July, 2017. For logistic manufacturers, the goods and services tax (GST) has now replaced the multiple state VATs and the need to have a hub across all states will cease to exist. Logistics is considered to be the backbone of manufacturing and trading activities in the economy. It has a critical role to play for developing countries like India wherein consumption is growing and demand is always high. The logistics sector broadly comprises of the road transport sector, the storage and warehousing sector and finally third-party logistics (3PL).

The logistics sector is being touted as one of the main beneficiaries of the new GST system. In the long run, operational efficiency is bound to improve. And while GST won’t solve many inherent problems of India’s transport network, it could reduce the logistics costs of companies producing non-bulk goods by as much as 20%. Hence, most of the current challenges of this industry will be a story of the past as India has become one single market wherein goods can move freely inter-state without any levy. This will further bring warehouse consolidation across the country and mega logistic hubs and high investments are expected in the infrastructure, which will boost the demand for forklifts as well. Diesel forklifts will remain dominant due to their own advantage in rugged outdoor applications. However, industries will now prefer electric forklifts over diesel because of low maintenance cost and lower total cost of ownership. Electric forklifts are available with various customisations and special attachments for specific applications. Forklift players are confident of a huge growth in the coming years. Competition in the forklift industry has certainly brought changes in terms of improvement in product quality, pricing and services; ultimately benefitting the customer.

Major companies operating in the forklift market of India are Godrej & Boyce Manufacturing Company Limited, Toyota Material Handling India Private limited, Josts Engineering Company Limited, Kion India Private Limited (Voltas) and Nilkamal Limited.

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Positive impact of GST on logistics & warehousing industry will boost up the demand for forklifts in India: Bonafide Research

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