India's logistics sector on track for $1.2 trillion by 2035: Report

India’s logistics sector is poised for a multi-decade boom, projected to nearly triple in value to approximately $1.2 trillion by 2035, according to a new report released on 22 September by investment advisory firm Omniscience Capital.

According to the report, this growth led to a powerful combination of unprecedented infrastructure investment, sweeping government reforms, and the rapid formalization of a traditionally fragmented industry.

The forecast positions the sector as a primary beneficiary of India's economic expansion, with the nation's GDP expected to more than double from $4.2 trillion in 2025 to $10 trillion over the next decade.

"The sector is on the verge of a multi-decade boom. Record public spending and a series of transformative government initiatives have created an exceptionally favorable growth environment," said Ashwini Shami, President and Chief Portfolio Manager at Omniscience Capital.

The report, titled India's Logistics: Powering a $10 Trillion Economy, identifies several key drivers underpinning the forecast.

A foundation of infrastructure and policy

At the core of the projected growth is a massive government-led infrastructure overhaul. Public expenditure on infrastructure has climbed from 2.1% of GDP in 2021 to 3.1% in 2025 and is on track to hit 5% by 2030.

"Government initiatives, such as the National Infrastructure Pipeline, PM Gati Shakti, and the National Logistics Policy, directly address the sector's inefficiencies," Shami said.

Strategic projects, including dedicated freight corridors and the ambitious India-Middle East-Europe Economic Corridor (IMEEC), are set to drastically reduce transit times and operational costs.

Shift towards formalization

A critical transformation highlighted by Omniscience Capital is the industry's shift from a largely unorganized structure to a more formal one. "Digitalisation and the Goods and Services Tax (GST) are accelerating the formalisation of the largely fragmented logistics industry," Shami noted.

The report estimates that up to 60% of the logistics industry could be formalized by 2035, a stark reversal from the current 80% unorganized base.

This structural shift is expected to improve efficiency, attract greater investment, and enhance service quality. The analysis points to the high stakes involved, noting that logistics costs currently represent about 30% of the nation's agri-industry GDP, a sector itself expected to contribute $4 trillion to the economy by 2035.