Foreign Investment in Indian Logistics: Threat or Opportunity?
India’s logistics industry is growing fast and gaining global attention. As per stats, the Indian logistics market was valued at US$ 317.3 billion in the year 2024 and is projected to reach $ 484 in 2029, growing at a compound annual growth rate of 8.8 percent. Impressively, the country improved its rank from 44th to 38th on the World Bank’s Logistics Performance Index, showing clear improvement in efficiency and infrastructure.
Furthermore, Government programs such as PM Gati Shakti Yojna, National Logistics Policy and massive investments in multimodal logistics parks are not just reshaping the logistic landscape but are making it a fertile ground for international logistics brands as well.
In recent years, several international players such as Panattoni and Blackstone have invested heavily in developing world-class logistics in India and driving the transformation of India’s supply chain infrastructure.
While this wave of foreign investment bodes well for India’s supply chain modernization, it has also sparked a pressing debate: Will the influx of international logistics players crush local businesses under their global weight or is there a path for meaningful coexistence?
In this blog post, we will discuss this topic in detail.
Read on to know more.
Overview: India’s Logistics Sector & Global Investment
India's logistics sector has traditionally been fragmented. However, with strong e-commerce growth and infrastructure progress, India is drawing increasing interest from global logistics developers.
Key International Investments:
● Global logistics developer Panattoni is making its India debut with a 25-acre industrial and logistics park in Hosur and investing ₹969.50 crore (US$113.26 million).
● USA’s leading logistics real estate company, Prologis has secured 6 million square feet of development potential across key markets in India. This includes a 4.4 MSF flagship logistics park in Chennai and a strategic 30-acre site in Hoskote.
● Blackstone has launched Horizon Industrial Parks and warehousing assets to expand its logistics footprint significantly. The platform includes marquee assets and focuses on serving key sectors such as e-commerce, retail and logistics.
Will This Investment Improve Indian Freight or Increase Costs?
India’s logistics landscape is evolving rapidly, bolstered by substantial foreign direct investment (FDI) and progressive reforms such as Union Budget 2025–26. With FDI inflows exceeding US$ 600 billion, and key players such as Singapore, the United States and Japan backing India's transformation, the logistics sector is being reshaped to meet global standards. Moreover, policies like Make in India and PLI schemes are creating a favorable environment for both foreign and domestic players.
At first glance, international investments in logistics might seem like they will drive up costs due to premium infrastructure and rising land values. However, the reality is largely positive.
Why It Helps:
● Enhanced efficiency :
Modern Grade-A warehouses use automation and are strategically located near freight corridors. This improves cargo handling and helps in reducing per-ton logistics costs.
● Boost to infrastructure & competition :
Global brands are also bringing innovations like solar-powered warehouses and automated docks to cut energy costs and boost productivity.
● Support for MSMEs :
With the rise of modern logistics parks, small and medium enterprises now have access to high-quality facilities and can scale their businesses without heavy upfront investments.
● Reduces unregulated and shady dealings :
An industry heavily reliant on paper and pen breeds inefficiency, encourages shady dealings and remains unregulated with poor or no business transparency. Standardized international solutions will help Indian businesses be at par with global competition and be a bigger player in the market.
Will Owning Logistics Assets Still Be Lucrative?
Traditionally, logistics companies aimed to own their warehouses and fleets. However, the industry is now moving toward more flexible, asset-light models. Global developers like Panattoni build large, flexible parks while logistics operators now prefer leasing over buying. Moreover, the rise of Specialized Services such as Cold chains and reverse logistics are expanding fast and focusing on service excellence rather than infrastructure ownership.
How Does India Compare to Developed Countries?
India has come a long way, but there’s still ground to cover when compared with global logistics hubs. For instance, developed countries such as the U.S. and Germany have extensive multimodal systems, but India is still heavily road-dependent (70% freight carry by road), resulting in higher logistics costs. Moreover, India lacks automation.
Currently, only 35–40% of India’s warehousing stock qualifies as globally compliant. Technology adoption such as AI-based inventory, and green logistics are still emerging in India and need greater investment and policy push for large-scale adoption.
The Competitive Landscape: Collision or Collaboration?
Global brands and Indian firms have the potential to build stronger, end-to-end supply chains through collaboration. Instead of pushing out local players, many international companies are choosing to invest in or acquire them. This approach promotes partnership over rivalry. Additionally, global firms bring advanced technologies and best practices thereby, improving service quality and accelerating digital adoption. Importantly, these collaborations also generate jobs and boost employment opportunities across the country. The Indian logistics market is big and it will continue to grow as we become the consumers for the world. There is space for growth for everyone in the current landscape.
Conclusion
In conclusion, the entry of international logistics brands is not a threat to Indian businesses, it is an opportunity. With modern infrastructure and advanced tech, these players are raising the bar for the entire industry.
The future of logistics in India is not “us vs. them.” It’s “us with them”. With the right balance, coexistence isn’t just possible, it is beneficial for all.