By Martina Kao    Photo：CANVA

As global supply chains become increasingly complex and diversified, India is gradually becoming an important player in global manufacturing and export trade. Through the government's "Make in India" initiative, India aims to drive the growth of local manufacturing, enhance export competitiveness, and occupy a more prominent position in the global economy. However, the success of this strategy relies not only on the development of the manufacturing industry itself, but also on the supporting upgrades of logistics and freight networks. This article will explore the impact of "Make in India" on global freight, from India's local freight demand and global logistics network challenges to infrastructure and future opportunities.

1. Overview of “Made in India”

"Make in India" is a national strategy launched by the Indian government Modi in 2014 to transform India into a global manufacturing center and promote the comprehensive development of Indian industry. By attracting foreign investment, improving local manufacturing capabilities, and promoting innovation, India's foreign direct investment (FDI) capital inflows into the manufacturing industry increased by 57% from 2014 to 2022.

The advancement of this initiative not only makes India gradually become an indispensable link in the global supply chain, but also leads to a sharp increase in freight demand in India and abroad. As more manufacturing investment pours in, India will face huge logistics challenges and opportunities in the coming decades.

2. Impact of manufacturing growth on local freight demand in India

The promotion of "Made in India" has greatly promoted the growth of local manufacturing, which has also directly increased domestic freight demand. As more factories are established, the logistics demand between various regions has increased significantly, especially the pressure on cargo transportation between industrial parks and transportation hubs such as ports and airports has increased significantly.

However, India's existing inland transportation system still faces many challenges. For example, the road network is underdeveloped, railway transport capacity is limited, and port infrastructure is relatively backward. These bottlenecks limit the efficient flow of goods within India, especially in areas with heavy traffic or imperfect infrastructure, resulting in higher logistics costs and long transportation times. Therefore, how to improve local freight infrastructure and optimize logistics processes has become the key to the continued growth of India's manufacturing industry.

3. Challenges and opportunities for global logistics networks caused by export growth

With the rise of India's manufacturing industry, India's exports have also increased significantly. This poses new challenges to global logistics networks, especially in the areas of sea and air freight. India's main export destinations include the United States, the European Union, the Middle East and the Asia-Pacific region, which means that more capacity is needed on major global shipping and aviation routes to meet the export demand for Indian goods.

First, India’s export growth may exacerbate tensions in global shipping capacity, especially in the context of post-pandemic global supply chain disruption. Problems such as insufficient ship capacity and port congestion may further push up freight rates and increase international trade costs. However, India, as an emerging global manufacturing hub, also provides huge opportunities for the global logistics industry. Logistics companies can respond to this challenge by optimizing transportation routes, increasing transportation capacity, and further improving digital logistics technology to improve efficiency and reduce costs.

4. Impact of India’s infrastructure development on freight transport

With the advancement of "Made in India", the Indian government has also realized the importance of logistics infrastructure and has increased investment in infrastructure such as roads, ports, and airports.

In addition, the modernization of port facilities is also key to India's logistics upgrade. Currently, major ports in India, such as Mumbai and Chennai, are facing serious congestion problems. To solve this problem, the Indian government is actively expanding existing ports and plans to build new deep-water ports to increase cargo throughput and transshipment efficiency.

The upgrade of these infrastructures will have a profound impact on India's local freight and international trade. Improved infrastructure will allow Indian manufacturing products to enter international markets faster and more reliably, thereby enhancing its global competitiveness.

5. Changes in sea and air freight

The growth of India's manufacturing industry has put forward new requirements for sea and air transport needs. In terms of sea transport, India's bulk commodity exports, such as textiles, chemicals and auto parts, still rely on traditional container shipping. However, as export volumes grow, India's ports are facing tremendous pressure to modernize and increase processing capacity.

In terms of air freight, India's air cargo demand is also growing rapidly as exports of electronic products and high value-added commodities increase. Major airports such as Delhi and Mumbai have become one of the important cargo hubs in Asia. However, the existing infrastructure is still unable to meet the growing demand. Therefore, India needs to further expand its air cargo infrastructure in the future to cope with the growing logistics demand.

6. Future prospects and challenges

The growth in freight demand brought about by "Make in India" is both a challenge and an opportunity. The challenge is to upgrade infrastructure to cope with growing logistics demands and ensure efficient operation of the supply chain. At the same time, India also needs to solve problems such as domestic traffic congestion, insufficient infrastructure, and excessive transportation costs. These are the main bottlenecks that limit its logistics efficiency.

However, as India's importance in global manufacturing increases, the logistics industry will also see huge development opportunities. Global logistics companies can gain more business opportunities in this emerging market by strengthening cooperation with the Indian market, improving digital logistics technology, and developing new transportation routes.

In the future, as infrastructure continues to improve, India has the potential to become a key hub in the global supply chain. By solving existing challenges, India's logistics network will become more efficient and reliable, further promoting the development of global trade.

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