(USGovernment-News.Com, July 10, 2018 ) Increasing investments and the growth of freight traffic is anticipated to drive GVA in the transport and logistics industry. The government has allocated a budget of US$11.0bn over 2018-2019 for national highway development. Initiatives such as Bharatmala project are expected to improve road transport infrastructure in India. Under this project, the government will invest US$83.2bn to develop 83,000km of highways by 2022. Due to the implementation of this project, road freight traffic is forecast to post a CAGR of 12.5%, rising from 2.7 trillion ton km in 2018 to 3.9 trillion ton km in 2022. In August 2014, the Indian Cabinet approved 100% FDI in railway infrastructure, which will help to modernize and expand railway projects.
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Road development initiatives to improve freight traffic
Freight traffic recorded a CAGR of 9.9%, rising from 1,508.0 billion ton km in 2012 to 2,419.9 billion ton km in 2017, and is anticipated to post a CAGR of 9.8%, from 2,660.0 billion ton km in 2018 to 3,873.6 billion ton km in 2022. Demand and an increase in connectivity drove the growth.
Growing industrialization driving the freight traffic
The rail freight traffic recorded a CAGR of 0.3%, rising from 649.6 billion ton km in 2012 to 658.4 billion ton km in 2017. Industrialization was a key driver. The increasing demand for mineral ores, steel, iron, fertilizers, petrochemicals and agricultural produce will support the sector.
Increase in demand is driving warehousing and storage GVA growth
Warehousing and storage GVA recorded a CAGR of 1.8%, rising from US$1,154.0m in 2012 to US$1,262.0m in 2017, and is anticipated to post a CAGR of 1.4%, from US$1.290.0m in 2018 to US$1,366.4m in 2022. Growth in the manufacturing, retail, FMCG, and e-commerce sectors has driven the demand for warehousing. Due to an influx of multinational companies, there has been an increase in the volume of modern and sophisticated warehousing stock, a situation that has attracted private equity firms to invest in warehouse infrastructure.
- Risk & Reward Index: The Risk & Reward index compares the position of India's transport and logistics industry with other countries in the region in terms of specific risk and reward parameters.
- Industry Snapshot and Industry View: Key transport and logistics industry statistics include freight traffic, freight volume, fleet size, passengers, import and export gross value added, FDI and trends driving market performance.
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