The Goods and Services Tax is just five months old but its benefit is going to be multi-decadal. One big beneficiary of the new indirect tax regime is the logistics industry and within the industry, it’s the 3PL (third party logistics) segment that is expected to grow at a faster rate. According to a Crisil report, the Indian logistics industry is worth Rs.6.4 trillion (FY17), of which 3PL is estimated to be around Rs.392 billion. Going forward, the 3PL segment is expected to grow to Rs.677 billion by FY20, a CAGR of 20% over FY17-20. The consolidation of warehouses in India is expected to provide opportunities for organised 3PL logistics service providers to manage complex distribution channels across different industry verticals such as heavy industrial goods, consumer goods, pharmaceuticals to name a few. More importantly, the booming e-commerce and organised retail businesses are expected to a give a fillip to the 3PL players.
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