Rahul Kapoor, Global Head of Shipping Analytics & Research at S&P Global Commodity Insights, and Rajesh Srinivasan, India Country Manager at Dimerco Express Group, recently joined host and producer Michael King on The Freight Buyer’s Club podcast, sponsored by Dimerco Express Group.
With India emerging as a major global manufacturer and exporter amid multinational companies seeking alternatives to China, Kapoor said that although India would not replace China as the workshop of the world, it will gain market share as supply chains diversify.
“Supply chain diversification is not a fad anymore, it’s actually happening, and it will continue to accelerate,” he said. “India stands to benefit from that, so that’s a massive opportunity to increase its share of global manufacturing exports.”
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Logistics Challenges
Despite India’s 38th rank in the World Bank’s Logistics Performance Index, Kapoor was optimistic. He believes that investments in ports, airports, roads, and railways will swiftly enhance India’s capacity to meet international manufacturers’ supply chain requirements.
“We’ve seen improving road and rail connectivity and a noticeable acceleration in highway building,” he said. “The share of containers being shipped by rail [is set to] increase to around 33% by 2030.”
“India has a huge coastline of 7,000+ kilometers, and 13 operating container ports which have connections around the world including to Southeast Asia, Europe and to the US,” added Srinivasan. “We also have 34 international airports and 11 airports [receiving] international freighters.”
Srinivasan also mentioned that three more international airports would be operational by 2025 as part of “a major infrastructure revamp” that would enable India to leverage its demographic and geographic advantages.
Kapoor said investments in new container ports and airports would enhance connectivity, while container lines were already launching more direct services as trade volumes increased. “All these reductions in logistics costs benefit both manufacturers and exports,” he added.
Focus: High-End Manufacturing
There was discussion on India’s ability to attract major investments from companies like Tesla, Apple, Asus, Lenovo, and Dell. Kapoor expects this focus to persist in high-end manufacturing sectors such as electronics, machinery, components, and electric vehicles (EV).
Economic expansion averaging 6.5% per annum over the next decade, allied with strong domestic demand and consumption growth, would further fuel investments, he added, citing S&P Global forecasts.
The complete episode of The Freight Buyer’s Club podcast offers an in-depth analysis of the current global freight market, insights into US inventory levels, and a glimpse into the outlook for 2024.
For an in-depth visual exploration of manufacturing opportunities in India, we invite you to view our infographic: Manufacturing in India: Opportunities & Challenges.
India’s EV market share is set to surge in the next decade. Dive into our eBook, to explore production challenges and the role of logistics in maximizing opportunities in the EV industry.
