India’s increasing role in the global economy and supply chains is opening vast avenues of growth for the Indian transportation market in all modes. Despite smaller volumes of transport in India, on comparison with developed nations, prospects for future growth are high.
New analysis from Frost & Sullivan (transportation.frost.com), Strategic Analysis of Indian Transportation Market, reveals that the total transportation market in India reached $344.7 million in 2006 and it is estimated to reach $699.1 million in 2013.
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"Strong economic growth in India backed by rising imports and exports is an important driving factor for the growth of cargo transportation," says Frost & Sullivan Research Analyst Aarthi Nandakumar. "The increase in containerized cargo is also expected to drive the demand for cargo transportation services in India."
India’s current share of 8.0 percent in containerized sea cargo is expected to increase to 20.0 percent over the next five years and the Government aims at nearly 100 million tones of containerized cargo by 2011-2012.
This growth is largely attributed to the proliferation of manufacturing centers in India, which is fast emerging as a manufacturing hub, next only to China. The production of automobiles and their components are also likely to drive the container cargo market.
Despite the rising containerization trend driving the transportation market, the poor infrastructure in India is a cause of concern for all modes of transportation as it directly affects cost efficiency and productivity, thus hindering the growth of the overall transportation market.
While air transportation suffers from poorly developed airports and inadequate ground handling equipment and access to cargo terminals, the ports lack the ability to accommodate 1,000 twenty-foot equivalent unit (TEU) container vessels. Meanwhile only 50.0 percent of the roads are paved, making access to rural areas difficult, resulting in longer delivery times and costs and the railways being controlled by a single government body, has an outdated infrastructure.
The joint efforts of the Government and service providers can tackle the issues of infrastructure. Governmental initiatives to promote private participation and attract foreign investment can go a long way in overcoming this challenge. Service providers can employ the advancements in information technology to provide better service and achieve customer satisfaction.
"By channeling more funds into infrastructural projects such as the golden quadrilateral, dedicated rail freight corridors, and privatization of airports, the Indian transportation market can take off on an exceptional growth phase," opines Nandakumar.
As globalization and the emergence of global supply chains define a greater role for India in the world economy, there is distinctly more movement of goods. This calls for an exemplary transport system to achieve high levels of efficiency and service. With improvements in infrastructure that would promote future trade, India can consolidate its position in global trade.
Strategic Analysis of Indian Transportation Market is part of the Automotive and Transportation Growth Partnership Service, which includes research in the following markets: ASEAN 3PL, 3PL in the Indian retail sector, 3PL in India, 3PL in the Indian FMCG sector, 3PL in the Indian auto components sector, 3PL in the Indian consumer electronics and durables sector, 3PL in the Indian IT hardware sector, 3PL in the Chinese FMCG sector, 3PL in the Malaysian FMCG sector, 3PL markets in the Malaysian automotive sector, 3PL markets in the Chinese retail sector, 3PL in the Chinese automotive sector, 3PL in the Indonesian automotive sector, and 3PL in Japan. All research services included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants. Interviews with the press are available.
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