New Delhi, Sep 22 : India's logistics sector is set to grow nearly threefold to around Rs 120 trillion over the next decade, a new report said on Monday.

The growth will be driven by a wave of infrastructure investments, government reforms, and the formalization of the industry, according to a report by Omniscience Capital.

The report highlights that India's GDP is expected to rise from $4.2 trillion in 2025 to $10 trillion by 2035, with industry and agriculture contributing $4 trillion to this growth.

Since logistics costs account for about 30 per cent of India's agri-industry GDP, the logistics market is projected to touch $1.2 trillion, or roughly Rs 120 trillion, by 2035.

Ashwini Shami, President and Chief Portfolio Manager at Omniscience Capital, said the sector is on the verge of a 'multi-decade boom' supported by record public spending and reforms.

'Government initiatives, such as the National Infrastructure Pipeline, PM Gati Shakti, and the National Logistics Policy, directly address the sector's inefficiencies,' he said.

Meanwhile, digitalisation and the Goods and Services Tax (GST) are accelerating the formalisation of the largely fragmented logistics industry,' he added.

According to the report, the government's infrastructure spending has already increased from 2.1 per cent of GDP in 2021 to 3.1 per cent in 2025 and is expected to touch 5 per cent by 2030.

Massive investments in roads, railways, and dedicated freight corridors, along with projects like the India-Middle East-Europe Economic Corridor (IMEEC), are expected to cut costs, reduce transit time, and strengthen India's role in global trade.

The sector's growth will also be supported by rising manufacturing output under Make in India and Production-Linked Incentive schemes.

At the same time, digitisation through platforms like the Unified Logistics Interface Platform, e-way bills, and RFID-enabled tracking has improved efficiency.

Policies such as GST 2.0 and the National Logistics Policy are expected to formalise up to 60 per cent of the industry by 2035, compared to the current unorganised base of around 80 per cent.

/IANS