Mumbai: India’s logistics sector is poised for a transformative decade, with its market size expected to triple to approximately ₹120 trillion by 2035, according to a report released by Omniscience Capital. The anticipated growth is attributed to a Capex ‘supercycle’, strategic infrastructure investments, and sweeping policy reforms aimed at modernizing and formalizing the sector.
The report highlights key government initiatives driving this expansion, including the ₹185 trillion National Infrastructure Pipeline and the PM Gati Shakti programme, which encompasses dedicated freight corridors, digital technology adoption, and strategic global positioning. These efforts are expected to significantly enhance efficiency and reduce costs across the logistics value chain.
India’s GDP is projected to rise from $4.2 trillion in 2025 to $10 trillion by 2035, with Industry and Agriculture contributing nearly 40% of this growth. Given that logistics costs in India account for 30% of the agri-industry GDP, the logistics sector is estimated to reach a valuation of $1.2 trillion, or approximately ₹120 trillion, assuming an exchange rate of ₹97 to $1 by 2035.
Ashwini Shami, President and Chief Portfolio Manager at Omniscience Capital, stated, “India’s logistics sector is on the verge of a multi-decade boom, fueled by record infrastructure investment and sweeping reforms. Government initiatives, such as the National Infrastructure Pipeline, PM Gati Shakti, and the National Logistics Policy, directly address the sector’s inefficiencies. Meanwhile, digitalization and the Goods and Services Tax (GST) are accelerating the formalization of the largely fragmented logistics industry.”
The report identifies several growth drivers, including increased manufacturing output supported by Make in India and Production-Linked Incentive schemes. Digitization efforts such as the Unified Logistics Interface Platform, e-way bills, and RFID-enabled tracking have improved operational efficiency. Policies like GST 2.0 and the National Logistics Policy are expected to formalize up to 60% of the sector by 2035, although nearly 80% remains unorganized, dominated by small fleet owners and fragmented operators.
India is also positioning itself as a strategic node in global trade through the development of the India-Middle East-Europe Economic Corridor (IMEEC), a multimodal network of ports, railways, and roadways designed to reduce transit time and costs.
Currently, India’s modal split for freight transportation stands at 63% by road, 25% by rail, and 6% by coastal shipping. This heavy reliance on road transport is attributed to underinvestment in rail and shipping infrastructure, in contrast to countries like the USA and China, where rail and shipping account for 40% and 55% respectively.
Infrastructure spending by the central government has increased from 2.1% of GDP in 2021 to 3.1% in 2025, and is projected to reach 5% by 2030, supported by cumulative investments of ₹105 lakh crore. India’s improved logistics capabilities are reflected in its rise on the World Bank’s Logistics Performance Index, climbing 16 positions to rank 38th in 2023 from 54th in 2014.
The report concludes that India’s logistics sector is undergoing a once-in-a-generation transformation. With robust policy support, infrastructure investment, and formalization, the sector is expected to evolve from a cost burden into a strategic growth engine for India’s $10 trillion economy. Growth in multimodal logistics parks, warehousing, rail freight, cold chain infrastructure, and third-party logistics will drive trade, generate employment, and establish India as a global logistics hub.
