The Logistical Challenges of Doing Business in India

India has long been a fertile ground for sourcing highly skilled IT and engineering services, but it’s estimated that manufacturing and retailing is the next boom.Fueled by a rising young, highly-educated, middle-class population, India’s economic boom is not expected to slow in the near future.
Currently, India sits atop the global retail opportunity index as the greatest underserved market in the world. This has significant opportunities for companies waiting to sell in this market. India’s retail industry, the 9th largest globally and valued at $330 billion, is mostly divided among 12 million 'mom-and-pop’ stores. But as the consumer market grows and demand for more luxury items increases, global leaders are hoping the planned $1 trillion in new investments in mall retail space, logistics infrastructure, and distribution capability will open opportunities to create organized retailing—multi-branded hypermarkets and mall-style shopping experiences.
Logistics’ Infrastructure Will Slow India’s Progress:
1.Insufficient channels: India is a diverse market, with 28 different states and many languages. Companies accustomed to national distribution agreements will find those opportunities virtually non-existent.
2.Limited physical infrastructure: These national highways account for less than 2 percent of the total road network, but carry 40 percent of the traffic. This is one reason the average speed in India is 20 miles per hour, compared to the West’s 60 miles per hour.
3.Over-burdened ports: Over-burdened ports:India has a long coastline, but its port system isn’t well utilized. 180 minor ports go virtually unutilized.. Even within its large ports, India can’t support 6,000 TEU containerships, which make up 25 percent of today’s shipping volume.
4.Disorganized trucking operations: Two-thirds of fleets have less than five vehicles, making it difficult for shippers to manage the plethora of carriers required to handle shipment volumes.
5.Limited technology basis: Firms don’t use technology to plan, execute or communicate logistics operations