EBTC - 2013 - Overview of The Demand in The Indian Transport & Logistics Industry

Overview of the demand in
the Indian transport and

logistics industry
www.ebtc.eu
Overview of the demand in

the Indian transport and
logistics industry
Contents
Introduction1
1. Transport and Logistics Industry a Potential for Growth?!
2. Indias Roads
2.1 Development and growth potential
2.1.1 Growth of vehicles
2.1.2 Growth in Road Length
2.2 Current Situation and future Projects
10
2.2.1 National Highways
11
2.2.2 State Highways
12
2.2.3 Rural Roads
13
2.3 Challenges in Transport by Roads
14
2.4.1 Natural challenges
14
2.4.2 Industrial/economic barriers
15
2.4 Potentials in Developing the Road Sector
16
3. The railway network in India
19
3.1 Development of the Rail Sector
20
3.2 Actual Circumstances
21
3.3 Improvements and Potentials of the Railways
23
3.5 Challenges
24
4. Indian aviation traffic
27
4.1 Progress of Indian Airways
28
4.2 Current domestic and international traffic
30
4.3 Airlines in India
31
4.4 Potentials Creating Projects
33
Overview of the Demand in the Indian Transport and Logistics Industry
5. Indian Waterways
5.1 Progress and Current Situation of Seaways and Ports
5.1.1 Major Ports
5.2 Potential for Growth and Projects
5.3 Challenges in the Maritime Sector
37
39
40
42
44
6. Urban Transport
6.1 Development of Urbanization
6.2 Current Situation of Urban Transport Systems
6.2.1 Travel demand
6.2.2 Potential for Urban Transportation
6.2.3 Challenges Facing Urban Transport
47
48
48
48
49
50
7. Logistics in Private Sector

7.1 Importance of Logistics (in India)
7.2 Potentials in Logistics and Technologies
7.3 Challenges in Logistics services
53
54
54
58
8. Summary of the main challenges and opportunities

8.1 Facing challenges
8.1.1 Natural Challenges
8.1.2 Industrial/Economic Challenges
8.2 Opportunities for India and EU
8.2.1 Opportunities for India
8.2.2 Industry Potential for EU Companies
61
62
62
64
65
65
66
Conclusion69
References70
European Business and Technology Centre
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List of Tables
Table 1: Share of the transport sector in the national economy
Table 2: Profile of the Road Sector
Table 3: Logistics Costs in different Countries
10
Table 4: State Road Projects with Private Sector Participations
13
Table 5: Profile of the Railway Sector
21
Table 6: Load Capacities in different Countries
22
Table 7: Improvements in the operations of Indian Railways
22
Table 8: Airport Statistics in 2003-04
29
Table 9: Investment plans in Indias aviation sector
34
Table 10: Profile of Indian Ports and Waterways, since 1980
39
Table 11: Cargo handled by Major Ports
42
Table 12: Major planned Investments in Jawaharlal Nehru Port
43
Table 13: Major planned Investments in Chennai Port
44
Table 14: Progress of the Share of Indian Metropolises
48
Table 15: Indo-EU Projects
67
List of Figures
Figure 1: Growth of registered Motor Vehicles in India, 1981-2003
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Figure 2: National Highway Development Program
11
Figure 3: T
he Demand Growth of the Transport Sector
in India in the 1990s
20
Figure 4: Development of Aircraft Movement since 2001
28
Figure 5: Development of Passenger Traffic since 2001
29
Figure 6: Development of Cargo Traffic since 2001
30
Figure 7: Transport Profile Air India and Indian Airlines
33
Figure 8: Traffic Growth in Indian ports
39
Figure 9: Road accidents in Indian metropolises in 2000
51
Figure 10: Gap analysis- Automobile Sector
57
Figure 11: Indian Electricity Production 2006
62
Abstract
India is one of the fastest growing economies in Asia and the entire world. Especially
in the transport and logistics industry sector, India shows superior growth rates
creating enhanced potential for foreign players. The objective of this summary
is to identify the market potential as well as the current demand in this sector
and to point out the investment perspectives, especially for European players.
Certainly, climate change affects these prospects. Hence, this summary exposes
the current Indian situation and the main challenges contributing to this. But
despite these problems and also resulting from these, India offers a high potential
for investments as the current studies have already shown.
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Introduction
India is one of the largest and fastest growing economies in the world.1 But it is
also a large underserved market.2
The following document is a summary of the demand in the Indian transport and
logistics sector. This has been prepared within the framework of the project Promoting
European Clean Technologies & Tackling Climate Change of the European Business
and Technology Centre (EBTC). Therefore, it will give an overview of the current
market situation in this industry and identify related challenges and gaps.3
The summary describes different sub-sectors of the transport and logistics
Industry in India by size and share. Additionally, the current situation is analysed
to demonstrate challenges faced by each sub-sector, which includes the
demonstration of market potential and the implicated perspectives.
Chapter 1 introduces the transport and logistics industry in India and shows its
share in the overall economy
In chapter 2, the Indian road sector is discussed. It accounts for more than the half
of Indias passenger and freight traffic.
Chapter 3 displays the railway network of India which is one of the worlds largest
and most heavily used railway networks4.
In the 4th Chapter the Indian aviation sector is described and analyzed. This fast
growing sector with its open sky policy already attracts foreign players.
Chapter 5 explains the current situation of Indian waterways. Its main challenge is
the current infrastructure situation which cannot cope with its constantly increasing
usage5.
The purpose of Chapter 6 is to demonstrate the urban transport system in India.
Urban transport is a vital factor in maintaining the productive efficiency of an
economy and providing adequate mobility.6
The penultimate chapter shows in general, the situation of the Indian logistics subsectors, concerning private entrepreneurship development and its technology
penetration by displaying the need for logistics service providers, especially third
party logistics and technology transfer.
The 8th and final chapter summarizes all perceived challenges and potentials at a
glance.
1 see Parera (2009), p. 29
2 see Kilgore/Joseph/Metersky (2007), p. 36
3 see Parera (2009), p.12
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4 see N.N. (2004), p. 14

5 see N.N. (2006a), p.2ff
6 see Padam/Singh (2004), S. 27
1. Transport and Logistics

Industry a Potential
for Growth?!
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The transport and logistics sector is a pivotal fundament that is important for
the development of a country. Since the 1990s, the transportation infrastructure
of India has undergone a significant change. While in the 90s, the demand for
transport grew at an annual rate of 10%, in the last decade the demand in the
transport and logistics industry grew along with the accelerating Indian GDP7. This
growth increased the demand for practically all transport services.
As shown in Table 1, the share of the transport sector of the GDP increases and
exceeds the proportion of investments in maintenance or improvement of this
sector.8
Table 1: Share of the transport sector in the national economy
Contribution of Transport
In GDP (%)
Year
Proportion of Transport in
Total Expenditures (%)
1999-2000
5.7
3.2
2000-2001
5.8
4,5
2001-2002
5.8
4.8
2002-2003
6.0
4.1
2003-2004
6.2
3.9
2004-2005
6.4
4.2
Source: Central Statistics Office. Government of India. (2006). National Account Statistics/CMIE. (2004).Public
Finance. Economic Intelligence Service.
The annual cost spends for Logistics services are estimated at 14% of the GDP as
the share of the total value of goods. Normally, in emerging economies, these costs
are about 6%-8% of the GDP. With this figure, Indian logistics costs are estimated to
be the highest in the world.9 Therefore it is necessary to manage this sector more
professionally in order to reduce operational costs, improve customer services and
satisfaction levels and to become more competitive in global markets10.
Another fact is that transport and logistics services in India, consume a large
portion of energy, especially petroleum products. This share increases even more
in India with the growth of economy and population11.
Urbanization and fast industrialization also increase this consumption because of
higher demand in freight and passenger transport.12 The Indian urban population
grows at an average rate of 3% a year and has increased significantly in the last 50
years from 62 million in 1951 to 285 million in 2001.
7 see Mitra (2006), p. 4f

8 see Singru (2007) p. 1
9 see Vaidyanathan, (2007), p. 13
10 see Mitra (2006), p. 1
11 see Ramanathan/Parikh (1999)
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Additionally, higher income and government liberalisation measures led to a rapid

growth in the number of automobiles, two- and three-wheelers, private and public
buses and urban rail networks, as well as an increased demand for leisure-related
travel.13
But despite the growth of the population of India and its economy in general the
transport and logistics sector faces accompanying challenges with its infrastructure,
environment pollution, increasing traffic density, policies and other inefficiencies in
the system.14

14 see Ramaswamy/Srinivas (2009), p. 1
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2. Indias Roads
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2.1 Development and growth potential

For a country, particularly of Indias size, an efficient road network is mandatory
for national integration, for socio-economic development and to sustain Indian
economic growth. Therefore, in the last few decades the transport sector
transformed increasingly from rail-dominated to road-dominated. 15
Although transport services by rail also exist in the metropolises, they play no major
role in Indian passenger mobility.16 Thus the roadways already hold an estimated
share of 80% of the demand on land transport. Furthermore, the demand in
passenger transport by road, recorded an immense growth since the 1980s as
it increased at a rate of 8% per year.17 This points to the growing presence and
variety of transport vehicles.
2.1.1 Growth of vehicles

The annual growth of motorized vehicles during the last decade was around 10%.
Compared to 21.7 million vehicles in 1991 the number of vehicles nearly trebled in
2001 with 55 million.18
Figure 1 gives an overview of the development of the motorized transport vehicles
from 1981 to 2003.
Figure 1: Growth of Registered Motor Vehicles in India, 1981-2003
Average Annual Growth Rate (%)
14
12
10
8
1981-2003
6
4
2
0
Two
Wheelers
Cars,
Jeeps and
Taxis
Buses
Goods
Vehicles
Others
Total
Vehicles
Source: Singru (2007), Profile of The Indian Transport Sector, p. 1.
Above all, the two-wheelers have a high growth rate which constitutes to over a
half of total vehicles.19 Furthermore, two-wheelers and cars account for example,
15 see Ramanathan/Parikh (1999), p. 15
16 see Padam/Singh (2004), p. 39f
17 see Singru (2007), p. 1
18 see Padam, Singh (2004), p.27
19 see Ramanathan/Parikh (1999), p.17
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more than 88% in Hyderabad and 91% in Kanpur. However, the share of buses
when compared to the two-wheelers is insignificant. They constitute merely 0.5%
in each of the cities mentioned above.20
Along with the vehicular growth, the freight transport also increased over the
years with an annual growth rate of about 12%.21 This can be attributed to the
rise in container traffic, as exports and imports increased 22-25% per year.22
Additionally, while traditional, non-mechanized means of transport, e.g. elephants
and camels, are still common, an increasing number of vehicles, especially trucks,
lead to increasing congestion.23
2.1.2 Growth in Road Length

At the beginning of the 90s the road length in India was about 2,041,000 km which
grew at an annual rate of approximately 3% in the following ten years. Compared
to this growth rate, the number of transport vehicles grew at approximately 15%
annually, indicating an increase in road usage, compared with the growth of road
length which developed proportionately low.
Besides, national highways which accounted for about 40% of the road traffic,
formed only a marginal, 1-2% of the total road length. Additional capacities were
hardly added, indicating a growth rate of merely half a percent in the National
Highways during the nineties. Due to the high growth in number of vehicles
and vehicle miles travelled and the slow growth in infrastructure, the capacities
were almost saturated and caused the need for large investments in the Indian
infrastructure. 24
A profile of the road sector is given in Table 2 showing the development of the
total network and national highways and the marginal investments in each of these
sectors.
Table 2: Profile of the Road Sector
Parameter
Total network
Unit
000 km
National highways 000 km
1980-81
1990-1991
1997-98
1999-2000
1485
2350
2540
2695
32
33.7
38.52
52.01
Source: Singru (2007), Profile of The Indian Transport Sector, p. 3
20 see Padam/Singh (2004), p. 27

21 see Singru (2007), p. 1
23 see N.N. (2004), p. 13f
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2.2 Current Situation and future Projects

The extensive road network in India consists of 3,3 million km and is the second
largest road network in the world. About 61% of the freight and 85% of the
passenger traffic is carried by road. The annual growth of cargo traffic is 15-18%
and that of passenger traffic is 12-15%.25 However, the concept of domestic cargo
container movement is still in its infancy in India. 26
Regarding the modes of transports, also in present there is a mixture of
modern and traditional means. While in urban transit mostly motor vehicles like
automobiles, minibuses, trucks and two- or three-wheelers are dominating, in the
landside transportation by beasts of burden like bullocks, camels and elephants
still exist.27
In India, the central and state governments are responsible for the transport
systems.
The central government has amongst others the responsibility for national highways,
railways, as well as national inland waterways and civil aviation. Thereby each mode is
controlled by a mode-specific ministry in the central government. The development,
management and maintenance of the national highways is in responsibility of the
National Highways Authority of India (NHAI) whereas the road development of the
states is managed through the several roads and buildings departments or public
works departments of the regions. In terms of village roads, the supply is held by
local bodies (panchayat).
In general, the infrastructure and network of the Indian roads are not in good
condition. About 1.4 million km of total route length are surfaced and more than 1
million km are covered with gravel, crushed stone or earth.28 There is no ability to
meet the high demand and density of the daily traffic. Further, the fuel prices are
rising, axel loads are more and more reduced and the freight costs for road (and
rail) are very high compared to other countries, see Table 3 below.
Table 3: Road transport Costs in different Countries
Country
Costs in cents/km
France
5.5
Japan
3.7
2.0
Canada
India
7.0
Source: Vaidyanathan, (2007), Current Status of Logistics in India, p. 13
25 http://www.infrastructure.gov.in/highways.htm
26 Vaidyanathan, (2007), Current Status of Logistics in India, S. 13
27 see N.N. (2004), p. 13
28 see N.N. (2004), p. 13
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The Government of India already planned some improvements to change this

situation for the better with aid of public and also private sector funding.
Revenues from the road sector are token from different sources, fuel taxes, vehicles
taxes and direct taxes on freight and passengers. In addition, road tolls and annual
fees are taken. With these public earnings expenditures for improvements in the
road network are funded.29
Furthermore, the beginning of the liberalisation process leads to changes in the
infrastructure sector, which is more and more opened up for private investment
and foreign direct investment (FDI).30
2.2.1 National Highways

More than 150 highways are announced as National Highways.31 The national
highway network which has a total length of 66,590 km, contains single-lane, for
38% of total national highways, and double-lane highways which account for 59%
of the national highways.32 Therewith it has a share of merely 2% of all roads but
carries about 40% of the road traffic and serves as arterial infrastructure across
India.33
The NHAI initiated the National Highway Development Program (NHDP) in 1998
to improve and widen the national highways. It is implementing 24,000km and
therewith constitutes a huge institutional success related with a positive impact
on the road sector development.34 Furthermore, the program completes a fourlaning, 5846 km long Golden Quadrilateral which connects the four big cities Delhi,
Mumbai, Chennai and Kolkata.35 With this programme, the Indian government
initiated the largest rehabilitations program for national highways, covering
presently round about 17,161 km with the aim of linking Indians major cities and
spanning the country north-south and east-west.36
An abstract of the subjects initiated of the NHAI in the NHDP is given in Figure 2.
Figure 2: National Highway Development Program
National Highway Development Program (NHDP)
NHDP I.:

Four-laning of the Golden Quadrilateral;

Link the four metropolitan cities: Chennai, Delhi, Kolkata, and Mumbai.
NHDP II.:

Four-laning of the North-South and East-West corridors;

The North-South corridor connects Srinagar to Kanyakumari;
The East-West corridor connects Silchar to Porbandar;
NHDP III.:

Four-laning of high-density national highways totalling 12,109 km;

The stretches covered carry high volume of traffic;
Provide connectivity to places of economic, commercial, and tourist importance.
29 see Singru (2007), p. 6f

30 see Padam/Singh (2004), p. 27
31 see N.N. (2004), p. 13
33 see N.N. (2006a)
34 see Singru (2007), p. 7
35
see N.N. (2006a),
p.
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36 see Singru (2007), p. 8
11
12
NHDP IV.:

Two-laning of 20,000 km of national highways;

Provide balanced distribution of improved highway network throughout country;
Capacity, speed, and safety on the new two-lane highways;
NHDP V.:
Six-laning of 6,500 km of four-lane national highways;
Comprising the Golden Quadrilateral and other high-density stretches of the 6,500 km
proposed under NHDP V, about 5,700 km will be taken up in the Golden Quadrilateral.
NHDP VI.:

Development of 1,000 km of expressways to serve the growing urban centres;

Particularly those located within a few hundred kilometres of each other.
NHDP VII.: Other highway projects: for full use of highway capacity and enhanced safety &
efficiency
Source: see N.N. (2006a). Indian Highways. Emerging opportunities for Profitable Partnerships. p. 8f
Additionally, an extra expedited road development program for the Regions in northeast (NHDP-Northeast) with 7,639 km road length is included whereof merely 40%
are national highways. The objective of this program is to connect the north-eastern
states and therewith accelerate the development in this less privileged region.37
Another important objective of the NHDP is the Port Connectivity Project involving
the improvement of national highway connections to the 10 major ports: Chennai,
Haldia, Jawaharlal Nehru Port, Kandla, Kochi, Mangalore, Mormugao, Paradip,
Tuticorin, and Visakhapatnam. Furthermore, the implementation of the road
connectivity objective to the ports helps to decongest and therewith to facilitate
growing port areas and their work.38
Summarizing, restructuring and strengthening steps are taken by the NHAI and
some mechanisms to address bottlenecks due to delays in environmental clearance
or land acquisition are established. In addition, traffic management and safety
related issues are more and more focussed.39
2.2.2 State Highways

The highways of the state together with major district roads reflect 13% of the
roads in India and carry 40% of the traffic. They are very diverse in their actual
state and stage of development.
While the central government is funding the national highways, state highways
depend solely on funding by state governments.
Besides, a larger share of the state funding is used for the development of rural
roads because of the extreme need to improve them. Private sector intervention
thus becomes more and more important in financing state highways.40
An overview of Indian states involving private sector participation in several projects
and the projected investment is given in Table 4.
37 see Singru (2007), p. 8
39 see N.N. (2006a)
40 see Singru (2007), S. 6f, Profile of The Indian Transport Sector
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Table 4: State Road Projects with Private Sector Participations 2.2.3 Rural Roads
State
No. of Projects
Estimated Costs($
million)
Gujarat
25
Jharkhand
12
Karnataka
104
Maharashtra
1,310
Orissa
Punjab
11
157
Rajasthan
28
90
Tamil Nadu
42
Total
58
1,748
2.2.3 Rural Roads

The rural road network in India consists of more than 2.70 million km of which
1 million km do not meet common technical standards due to unsystematic
planning.
There are diverse agencies aiming the development and maintenance of rural roads
but without any uniform development plan.
The rural roads development agency of each Indian state, manages the rural roads
program Pradhan Mantri Gram Sadak Yojana (PMGSY) which is sponsored by the
central government. The PMGSY is initiated in parallel to the National Highways
Development Program ( NHDP) for the national highways and has the objective to
systematize the rural road development effort.
Following guidelines were considered while planning the rural road program:
all-weather connectivity for all habitations with population 500 (250 for
hill states and desert / tribal areas)
network augmentation and modernization
new connectivity to: 60,000 habitations with population 1000,

81,000 habitations with population 500,

29,000 habitations with population 250
upgrade of rural roads of about 370,000 km.
The guidelines changed several times because of uncertainties of implementation
and the prioritization of arrangements. Projects were in confusion as the data
of habitations were not reliable. As a result, the program implemented only
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13
14
several low-priority projects at the beginning. This was mainly because they were
convinced these projects had high priority. However, these problems have now
been addressed. 41
2.3 Challenges in Transport by Roads

2.4.1 Natural challenges
Energy
The transport sectors energy consumption amounts to petroleum products such
as gasoline and high speed diesel and depends on the one hand on the modal split
and on the other hand on the vehicle speed. Among different modes of transport,
buses on average, have the least consumption of energy per passenger-km. For
comparison, two wheelers have 2.5 times the consumption of buses and threewheelers 4.8 times that of buses. Furthermore, cars consume on an average, the
most energy per passenger-km, i.e. they consume 6 times more energy. This also
implies that the fuel costs differ accordingly. For example two-wheelers are 6.8
times costlier than buses. Further, three-wheelers and cars are up to 11 times
costlier. Not only does a car use more energy and is therefore costlier, it also takes
more road space than buses when providing the same passenger mobility level.42
Due to the motorization in India an immense pressure on the natural energy
resources of India is imposed.43
Air Pollution
The cities in India have to cope with environmental problems due to strong air
pollution. The increasing number of fuel using vehicles, lead to increased pollution.
The vehicular emissions alone contribute to 72% of air pollution in total in Delhi
and the burning of fossil fuels accounts for about 83% of the carbon dioxide
emissions.44 The most common particles associated with motorized vehicles
polluting the atmosphere are nitrogen oxides, hydrocarbons, carbon monoxide,
as wells as sulphur oxides. The air pollution in most Indian cities has become
dangerous and has badly influenced the health of the population with regard to
diseases in respiration.45
Transport systems and air pollution are directly related whereas the emissions of
vehicles depends on different factors such as their speed, age and emission rate.
The Centre of Science and Environment states that that there is a negative correlation
between the quantity of the pollutants, above all nitrogen oxide, hydrocarbons and
carbon monoxide and the speed of a vehicle. Since the average speed in peak
hours is very slow, during these times the air pollution drastically increases. Hence,
41 see Singru (2007), p. 9
42 see Padam/Singh (2004), p.38
43 see N.N. (2009), p. 1
44 see N.N. (2009b), p. 1
45 Padam/Singh (2004), p.37
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congestion in cities leads not only to delays but also to an increase in pollution.
Further, personalized vehicles such as two-wheelers and cars and para transit
modes such as rickshaws have a high emission rate, i.e. the number of pollutants
per km, compared to mass transport modes such as buses and trucks. Thus, as
mentioned before increases in personalized modes of transport also increase the
vehicular emission. 46
2.4.2 Industrial/economic barriers

Fragmentation of Industry
The fragmented structure even in the organized sector of the road industry and the
numerous dominating unorganized operators in this sector, make development and
fair competition very difficult.47 However, small operators depend on other players
for handling and marketing, for example: brokers depend on booking agents. The
last mentioned group of handlers is the dominant one with the ability to set freight
rates. This system increases the price for the end users, leading to low quality of
services as well as low profitability for truck operators.48 More over, because of
this fragmentation of the industry, economies of scale can rarely be achieved. 49
Bureaucracy
There exist numerous barriers, concerning the movement of road freight between
different Indian states:
One major hindrance for freight vehicles is the non-uniform state tax structure and
a huge bureaucracy in checking essential documents, e.g. the vehicle registration
book, the driving license and the imposed taxes, as well as octroi at some of
the the state borders. Moreover, documentation requirements vary from state
to state and make this industry unattractive and ineffective. A violation of these
rules can lead to penalties such as detention. Such barriers cause long delays in
freight transportation and increase transaction and operational costs which create
opportunities for rent-seeking, e.g. dodging the taxes and norms.To give an example,
a transport vehicle loses 1 to 2 days complying with all formalities on Indian roads
and has to pay up to 25% of its transported value for taxes annually. Due to this,
the freight costs including all these operational costs are major components of the
product costs themselves.50
When internationally compared, this results in a lower competitiveness of Indian
logistics providers.
Infrastructure
Infrastructure is a significant set back in India. Other than on highways, running
trucks is only possible for firms using trucks smaller than 20 feet.51 Hence, the road
46 Padam/Singh (2004), p.37
47 Mitra (2006) p. 5
48 see Ganguli (2008), p. 31
49 Mitra (2006) p. 5
50 see Mitra (2006) p. 5
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15
16
infrastructure constitutes a major hurdle.For example, for large vehicles such as

multi-axle trucks.52 The infrastructure of Indias roads is limited and the conditions
of the roads make it difficult to have a smooth transportation and operation system.
Therefore, the few but better conditioned national highways are overloaded and
filled with the big vehicles lowering the average speed to 10-20 miles per hour.53
Further, this leads to more accidents, shorter lifespan of vehicles, an increase in
the fuel consumption, higher operating costs caused due to making detours and
reduced efficiency.54 However, the infrastructure investments are merely 4%.55
Additionally, the difficulties in inter-state movement mentioned above is also
hampering the logistics companies, resulting in delays. Thus, the presence of a
system of using containerized trucks would be better for logistics because it would
fasten the transfers at ports and avoid great thefts at checkpoints.56
Labour policy
The almost non-existing labour policy is yet another barrier in the road transport
system.. The drivers of trucks are poorly trained due to lack of formal training
institutes for related areas like proper handling etc. and due to a lack of participation
in driver training schools. So there is a higher demand in getting a drivers license
than the supply of training institutes. Further, the quality and standards of the few
existing ones is often not controlled.57
2.4 Potentials in Developing the Road Sector

Bus Transport
Regarding the challenges of high energy costs and air pollution, bus transport may
play a major role to provide passenger mobility with a certain level of safety. In
comparison with the other vehicles, bus transport is favourable in its efficiency
from the environmental point of view. Since it is not easy to make people change
their habits in using private vehicles, a certain quality in bus services as well as a
given variety of bus transport modes is necessary to cater to the demand of wide
segments of society.
Optimum public satisfaction can only be reached through flexibility in determining
the transport factors, such as frequency of service or the routes and sizes of vehicles
used. Too much government influence and governmental restrictions in these factors
may lead to lower quality and inefficiencies. Therefore, a policy with private public
participation would be a potential for operators becoming more responsive to the
needs of the customers.
52 see Ganguli (2008), p. 31
54 see Ganguli (2008), p. 31
56 see Ganguli (2008), p. 31f
57 see Ganguli (2008), p. 32
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With the rapid growth of population and the related travel demand, bus transport
services may have an even higher demand and an expansion of public mass
transport systems is a solution.58
Road Infrastructure and Automobile Sector
Also, in the infrastructure and transport management system strategy, there is
potential to increase the existing capacity and safety on the roads. This may be
seen not only in constituting a uniform traffic system, but also in improved signals
and bus priority lanes. In the short run, the potential in the infrastructure is in
improving the quality of roads, providing ring roads and detours and in construction
of new footpaths and roads. In the long term however, an upgrade of technology
is important for improvement in this sector and hence this constitutes a potential
for investments.59 India has already made some bilateral investments, inbound and
outbound deals with EU companies, e.g. with Elsamex SA to finance and organize
the development of the road infrastructure. 60
Due to the growth of the population and the related demand in personalized vehicles
there exists a potential for the automobile industry, i.e. an increase in car sales and
use.61 Also the Indian know-how in this sector becomes convenient for global
car companies, e.g. to test their vehicle performances and to get internationally
certificated. Many auto and engineering firms also located their international
purchase offices in India.
Some of the EU original equipment manufacturers like Ford Motor Company,
Volkswagen, BMW, and Man Force Trucks Private Ltd. have established
manufacturing facilities in India.62 Robert Bosch GmbH has also established some
manufacturing facilities to produce its automotive components in India.63
Coping with Energy and Climate Change
Developments in the field of renewable energy have the potential to reduce Indias
dependence on carbon-emitting fuels. Hydropower and new energy such as solar
and wind power could lower this dependence.64 Indo-EU co-operations could
support this, e.g. the British BP has already built a Joint Venture with Tata called
TataBP Solar, to promote solar power as an alternate source of energy.65
In order to reduce the environmental impact of the fast economic growth and huge
motorization, an improvement in the coal-based power plant efficiency is needed.
Currently, the Indian power plants are based on sub-critical steam cycle technology.
More efficient and cost-effective plants are an option for EU-India collaborations
exploring possibilities of lower cost plants through foreign direct investment in this
sector.66 Further potential for a collaboration with the EU in R&D work, is the Zero
Emission Power Plant with Carbon Capture and Storage (CCS) as a solution for
carbon emissions to identify suitable geologic storage sites.67
60 see Parera (2009), p. 33f
61 see Bose/Sperling (2001), p. 3
62 see Parera (2009), p. 40
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63 see Parera (2009), p. 38

64 see Kumar (2007), p. 12
65 see Parera (2009), p. 59
66 see Kumar (2007), p. 12
67 see Kumar (2007), p. 11
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3.The railway network in India
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3.1 Development of the Rail Sector

Since 1980, the share of railways in total transport economy recorded a decline of
20% in passenger as well as freight transport. The total kilometres effected with
transport by rail was approximately 553 billion in the 1990s which is only one-fifth
of those from the roadways.68
Figure 3 illustrates a comparison of the road and railway development since the
1990s which underlines the transformation of the transport sector from railways to roadway-dominated.
Figure 3: The Demand Growth of the Transport Sector in India in the 1990s
14
12
10
8
Freight
Passenger
6
4
2
0
Road
Rail
Domestic
Air
International
Air
Seaports
Moreover, the demand for rail transport did not grow as fast as the road sector. In
the passenger traffic, the demand is growing at just 3.6% annually and in freight
transport, the growth rate is only 1.4% per annum.
Table 5 gives an overview of the development in the railway sector since 1980 to
underline the small growth rate in this sub-sector. The total route length increased
from 1980 merely from 61,240 km to 62,759 km in 2000. The passenger traffic
increased from 3,613 million passengers in 1980/81 to 4,585 million passengers in
the year 2000 and the freight traffic had a rise from 220 t to 456,4 t over a period
of 20 years. 69

69 see Singru (2007), p. 2
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Table 5: Profile of the Railway Sector 3.2 Actual Circumstances

Parameter
Unit
1980-81
1990-1991
1997-98
1999-2000
Route Length
km
61,240
62,367
62,495
62,759
220
341,4
429,4
456,4
3,613
3,858
4,348
4,585
Freight Traffic metric ton (t)

Passenger
Traffic
million
3.2 Actual Circumstances

In sharp contrast to these historical data of merely 3-4% of growth rate, the freight
and passenger traffic in the railway sector has been growing at an average rate of
9.4% and 7.4% in the last years and the revenue has grown even faster.70 Both,
freight and passenger carriage, keep on continuing to expand annually.
The Indian Railways are the single national domestic provider since the 19th century.
It owns and presently operates 63,221 route km, has 1.42 million employees, 440
billion km of freight and 615 billion passenger km and thus is one of the worlds
largest rail networks.This railway infrastructure constitutes the mainstay of transport
infrastructure of the entire country71 and is further the fourth most heavily used
one.72 At present, the freight and passenger revenues of Indian Railways are rising
with the international trade and growing traffic flows on rail and road.
Indian Railways holds 44 steam locomotives, 4801 diesel and 3065 electrified
ones. These locomotives are equipped with more than 220000 wagons to carry
the high passenger and freight demand. Daily, 16021 trains run whereof about
40% of them are trains used to transport freight and 60% are passenger trains to
carry nearly 15 million passengers per day.73 Compared to 5 million passengers in
the year 2000, the demand in railways has increased tremendously.
Further, most of the rolling stock and other elements are produced by domestic
companies but more and more commercial agreements with foreign enterprises
exist to manufacture components for the railway sector.
There exist some high speed routes in India and the use of them is also increasing.
Besides, several urban passenger rail systems are also used in India. Chennai for
example has a rapid transit system, Kolkata has a full metro system and the metro
system in New Delhi is expanding. Further, there are suburban rail networks, e.g.
in Bangalore and Mumbai.74
70 see N.N. (2006c), p. 3
71 see N.N. (2006c), p. 3
72 see N.N. (2004), p. 14
73 see N.N. (2006c), p. 3
74 see N.N. (2004), p. 14
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The broad upturn in the performance results of the railways, results from a
strategy for regaining the predominance of railways in the whole transport sector.
This strategy was built around the optimization of already existing equipment,
infrastructure and another approach to the traffic segment. Some examples of
innovations are: an increase in axle load (from 20.3 to 22.9 t), a reduced turnaround
time of 5 days, a rise in popular passenger trains using spare stocks of coaches, all
in all providing an adequate freight-loading and carrying capacity per train.
In comparison to other countries, as it can be seen in Table 6, the pay load is even
smaller in India. Indian Railways can carry 450kg of wagons with dead weight for
every 1000kg of freight carried. In the US for e.g. for the same amount of freight
carried, only 170kg wagons with dead weight can be carried.75
Table 6: Load Capacities in different Countries
Countries
India
Australia/Europe/US
23.3
100
Capacity (TEUs)
90
150
Axle Load of Wagons (TONs)
22
30
Load Capacity per Wagon (TON)
88
120
Pay Load: Tare Weight of Wagon
2.-2.6
4.5-5.5
Parameter
Average Speed (kmph)
Source: Vaidyanathan, (2007), Current Status of Logistics in India, p. 16
All these reinventions linked with All these reinventions linked with the new
strategy led to a positive by-product of lower unit costs of operation, which can be
seen in Table 7.
Table 7: Improvements in the operations of Indian Railways76
Indicator
2000-2001
2005-2006
Freight unit cost (paise per net ton-km)
61
52
Freight operating margin (%)
22
57
2,042
3,000
Net ton-km per wagon per day
Source: Singru (2007), Profile of The Indian Transport Sector, p.10
With these measures, With these measures, the railways could act and operate
again as a competitive and feasible option to road transport and redefined the
transport sector India. Now, this sub sector is regaining market share and exceeds
with its traffic growth the growth in GDP. Operating margins are only some
advantages of the transformation. Moreover, huge efficiency gains and financial
surpluses were delivered.77
76 see Singru (2007), p. 10
77 see N.N. (2006c), p. 4ff
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3.3 Improvements and Potentials of the Railways

Indian Railways set up a strategy to avoid or remove bottlenecks and increase the
capacity of handling traffic to match the demand. The most important elements
of this strategy would lead to investments in development of infrastructure, in
the modernisation of the technology of the wagons and in a better signallingand telecommunication system, as well as in high horsepower locomotives and
information technology. All in all, the aim is to improve transit times, operation unit
costs and terminals and to bench mark to get best standard in the world.78
The measures for keeping and further improving the new advantages include
amongst others:

Commercial development of railways land and air space (non-tariff) to

generate revenues
Roll-on roll-off services on Konkan Railways
Tie-up with Central Warehousing Corporation
Door-to-door transportation of freight.79
The Metro City Railway Stations in the metropolis like Delhi and Mumbai and so
on, also need modernization to offer world-class services for passengers mainly
due to the large quantity of passengers using these stations. There is a pilot project
for Delhi Station already ongoing.80 Other plans for metro, light rail, or both exist
for Bangalore, Coimbatore, Hyderabad, Jaipur, Lucknow, Mumbai, and Pune.81
Another potential to generate revenues is the commercial use of around 43,000
hectares of vacant land owned by Indian Railways. These areas around railway
stations are mostly installed in lengthwise strips along the tracks and could serve
as capital for modernization.82
In addition, the Ministry of Railways also decided to develop the rail tracks with
building dedicated freight corridors in high-density routes in Western and Eastern
India, e.g. the Delhi- Mumbai Industrial Corridor, to enable the Indian Railways to
compete with the road sub-sector. This includes new tracks for freight trains along
the Golden Quadrilateral and a possibility for the trains to run over 100 km per hour.
By the way, those separate tracks help to avoid accidents with passenger trains
and resulting delays.
Further initiatives are technological upgradation and modernization, transformation
from bulk- to multi-modal transporters and Public Private Partnership envisaging
new railway stations, routes and logistics parks. Attracting private investments by
78 see N.N. (2006c), p. 3
79 see Singru (2007), p. 10
80 see N.N. (2006c), p. 6
81 see N.N. (2004), p. 14
82 see N.N. (2006c), p. 6
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allowing the areas around stations to be commercially developed while operational/

passenger-handling areas are separated from commercial ones, are some of the
plans of the Ministry to implement the initiatives.83
Another initiative of the government to improve the current situation is the National
Rail Vikas Yojana. Its objective is to develop and improve capacity in sections of the
railway network that are critical. Further, it has three components:

Golden Quadrilateral rail services and strengthen diagonals

Rail connectivity to ports strengthen/ develop multimodal corridors
(particular to hinterland)
Construct 4 major brigdes (Bogibeel, Munger, Patna Ganga, brigde over
Kosi river). 84
With these improvements, railways will be able to handle twice as much traffic
volume as at present, by 2012.
3.5 Challenges
In the railways sector the incidence of hurdles is lower than in the road sector as
reported from logistics companies. It can be noticed that the major barrier liess in
the lack of a dedicated freight corridor. 85
Obligations of Service Providers
A major barrier in this industry is the high dependence on external operators
or agencies, such as Indian Railways, which is the only provider of the railway
network. 86
Indian Railways, offering the entire infrastructure such as signals and containers
has many social obligations, e.g. low cost passenger service and is coping with
them by subsidizing which involves excessive freight tariffs to cover the running
costs of the railway.87 Also other operational issues such as service guarantee
and dedicated freight corridors are still unresolved. There exists such a volume
fragmentation because of too many operations and uncontrolled haulage costs.88
Furthermore, financial constraints such as the fare structure determined by the
policy, hamper the railway sector traffic.89
83 see N.N. (2006c), p. 6

84 see Singru (2007), p. 10
85 see Ganguli (2008), p. 32
87 see Ganguli (2008), p. 32
89 see Ganguli (2008), p. 32
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Infrastructure : Inadequate Connectivity

In addition, delays even in transports on the main railways between the metropolises
are attributed to inadequate rail corridors, as it takes nearly a week to transport
cargo from Mumbai to Delhi. Lack of proper connections to ports is another cause
for hindrance in a smooth transport system. Often there is only a single track line
directly connected to one of the Indian ports.90 For example, about 60% of the,
port traffic on the west coast, is moved by rail to the northern hinterland implying
huge congestion on these routes.91
However, barriers such as red tape and high taxes, and the associated additional
costs as in the road sector is not applicable in the rail sector.92
90 see Ganguli (2008), p. 32

92 see Ganguli (2008), p. 32
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4. Indian aviation traffic
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4.1 Progress of Indian Airways

The Indian civil aviation traffic, especially aircraft movement and passenger traffic,
is growing in great leaps.93
Regarding the aircraft movement in general, the traffic increased from about
500,000 flights in 2001-2002 to nearly 840,000 flights in 2005-06, as shown in
Figure 4. This describes a leap in the growth of aircraft movement from 9.9% to
16.8%.94 As can be seen in the Figure, the domestic traffic is even higher than the
international one.
Figure 4: Development of Aircraft Movement since 2001
Source: Ministry of civil Aviation (2006), p.2
Since 1980-81 the number of Indian airports increased from a total of 84 to 122
in 1999-2000 and 125 at present. Collectively, they handled about 40 million
passengers at the beginning of 2003.95
Table 8 illustrates the passenger traffic for the several airports in 2003-04.
93 see Ministry of civil Aviation (2006), p. 1

95 see N.N. (2004), p. 14f
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Table 8: Airport Statistics in 2003-04

Passenger traffic
(million, 2003-04)
Airport
Bangalore
3.2
Chennai
4.6
Delhi
10.3
Hyderabad
Kolkata
2.2
3.0
Mumbai
13.3
Source: N.N. (2006d), Airports. http://www.infrastructure.gov.in/airports.htm
By 2004 and 2005 about 60 million passengers were handled at Indian airports.
From 2001 the growth rates in passenger traffic jumped from 9.4% to 23.7% in
2005-06.96 This development of passenger traffic is illustrated in Figure 5.
Figure 5: Development of Passenger Traffic since 2001
Source: Ministry of civil Aviation (2006), p.2
In the first half of 2006-07 the domestic passenger traffic grew at 48% and the
international passenger traffic at a rate of 16.3% compared to the previous year.97
At the beginning of 2003, Indian airports handled around 900,000 tonnes of cargo
and by 2004-05, 1.3 million tonnes of cargo has been handled..98 In this sector, the
growth rates also showed a growing trend even if there were some upsurges and
some downturns in the yearly growth rates. For example in 2002-03, there was
98 N.N. (2006d), p. 1
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a growth of 14.6% compared to the year before and in 2003-04, the growth rate
compared to 2002-03 was only 9.1% but grew again in 2004-05.99 The cargo traffic
development is shown in Figure 6.
Figure 6: Development of Cargo Traffic since 2001
Source: Ministry of civil Aviation (2006), p. 2
As can be seen in Figure 6, international cargo traffic is more likely in demand than
domestic cargo traffic.
4.2 Current domestic and international traffic

Compared to worlds aviation industries, the aviation industry in India, is one of
the fastest growing with an annual growth rate of about 18%. In 2008, it was
worth US$ 5.6 billion. These results are not only as from the open sky policy of
the government and the fast air traffic growth, that has exceeded 20% in the last
two years, bringing out many foreign players and new private airlines to enter the
market. Further, higher frequency of flights for international airlines could also be
noticed.100 So, the industry could grow in terms of players as well as in terms of
number of aircrafts. From the 12th position in the worlds aviation market, India
reached the 9th position in 2009. By 2010, more than 100 million passengers on
the total market are expected from the Centre for Asia Pacific Aviation (CAPA).101
Currently, the Airports Authority of India (AAI) regulates and controls all 125 airports
100 see N.N. (2009c), p. 1
101 see N.N. (2009c), p. 1
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whereof 11 are declared as international airports.102 The scheduled domestic air

services can be provided from 82 airports to match the high demand, compared to
75 in 2006. As forecasted by the Centre for Asia Pacific Aviation (CAPA), the traffic
at domestic airlines will increase by 25-30% by 2010.103
The prognosis of the CAPA for the international traffic mentions an increase in
growth by 15% by 2010.104 Big cities like Kolkata, Chennai (Madras), Mumbai, New
Delhi and Thiruvananthapuram posses the major international airports. But also
Bangalore, Guwahati, Hyderabad provide international service.105
Indias cultural heritage and nature are an interesting destination for leisure
travellers from overseas but also due to a growing economy, India is attractive for
international business travellers.
Currently, several policies to support aviation infrastructure are in place. Foreign
direct investments under the automatic route, are permitted up to 100% for green
field airports and partly for existing airports. Further, private players developing the
infrastructure are allowed to setup general airports and airstrips at a distance of
150 km to the existing airports. Moreover, for new airport projects, a tax exemption
is given over a period of 10 years. While 100% equity ownership is allowed to be
held by non-resident Indians in domestic airlines, only 49% FDI is permitted under
the automatic route, however, not for foreign airlines. In cargo, nearly 75% of FDI
is permissible.106
Delhi and Mumbai airports are already privatised and expanded in 2006 at an
estimated investment of US$ 4 billion. Also new international airports are operational
in Bangalore and Hyderabad which are built by private players or consortiums at an
investments of about 600 million.107
4.3 Airlines in India

In 1953,the government of India nationalized all existing airlines and built the Indian
Airline Corporation engaged in domestic air services and Air India International
offering international services. These two companies had a monopoly position
on the Indian aviation market until the year 1991. In 1994, private airlines were
also allowed to operate scheduled air services. In 2003, the aviation industry
witnessed a major change. Air Deccan introduced budget flights by offering lower
transportation expenses down to 17% of the prices of other airlines. Currently, the
list of budget airlines consists of Spice Jet, Go Airways and Kingfisher Airlines, as
well as the Paramount Airways. They mainly own the major market share on Indian
aviation industry market and set off newer trends. 108
102 see N.N. (2006d), p.1
103 see N.N. (2009c), p. 1
104 see N.N. (2009c), p. 1
105 see N.N. (2004), p. 14f
106 see N.N. (2006d), p.1
107 see N.N. (2009c), p. 1
108 see N.N. (2009d), p. 1
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National airlines
The central government of India currently owns two airlines, i.e. Air India and
Indian Airlines, as well as one helicopter service, the Pawan Hans. Both airlines
are international as well as domestic flag carriers.109
The development of Air India and Indian Airlines since 1980 is given in the following
figure.
Figure 7: Transport Profile Air India and Indian Airlines
million
2500
2000
1500
Available ton-km: Air India
Available ton-km: Indian Airlines
1000
500
0
1980-81
1990-91
1997-98
1999-2000
Source: Ministry of civil Aviation (2006), p. 2
In 2003, the government has divested more than the half of the equity in both of
the airlines. The major regional airports are located amongst others in Ahmadabad,
Allahabad, Chandigarh, Cochin, Nagpur and Pune.110
Private Airlines
Currently, there are 12 privately owned airlines, e.g. Jet, Sahara, Kingfisher and
Spicejet, that account for round about 75% share of the general domestic aviation
market and especially for around 60% of the domestic passenger traffic. They are
also offering international flights to certain destinations.111
The airlines continuously offer new flights/routes and an innovative pricing structure
to attract more customers.112
109 see N.N. (2006d), p.1

110 see N.N. (2004), p. 15
111 see N.N. (2006d), p.1
112 see N.N. (2009d), p. 1
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In support of the aviation industry growth, ten of the major domestic airlines
promoted the Federation of Indian Airlines (FIA) for growth in the airport
infrastructure, to cope with potential problems in the domestic segment and to
create new trends in this sector. The research of the Ministry of Civil Aviation
ensures technological advancement.113
4.4 Potentials Creating Projects

Successful demographics and a fast growing economy, indicate a continued
increase in domestic passenger traffic as well as in international outbound traffic.
The inbound traffic at the international level will also grow further with additional
trade activities and investments.114
To boost the growth in civil aviation, significant measures are on the anvil.
Opportunities and potential in the Indian aviation sector can be seen through
increasing investments in new aircraft, development of airport infrastructure as
well as maintenance, repair and training. 115
Modernisation of existing airports is one of the measures of the government, with
the plan to invest about US$ 9 billion. In addition, the development of around 300
unused airstrips is planned. 116
Huge investments are planned during the next 5 years.. Nearly half of this investment
will be used for the metro airports in Chennai, Kolkata and Trivandrum. The balance
will be used to upgrade non-metro airports, city airports, aeronautical equipment, as
well as Greenfield airports for resort destinations or for emerging metros like Goa,
Pune and Kannur. The Greenfield international airports in Bangalore and Hyderabad
will be modernized and are under construction. Also Delhi and Mumbai airports are
listed to be modernized. A plan for 35 non-metro airports is also projected to keep
a balanced airport development.117
There are different companies showing interest in the aviation industry of India.
Nearly two-thirds of the Investments in airport infrastructure are expected to
come through public private partnerships.118 To provide a level playing field to all
players, including foreign companies, the government wants to set up an Airport
Economic Regulatory Authority.
113 see N.N. (2009d), p. 1

114 see N.N. (2006d), p.1
115 see N.N. (2006d), p.1
116 see N.N. (2009c), p. 1
117 see N.N. (2006d), p.1
118 see N.N. (2009c), p. 1
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Some companies and their plans concerning investments in Indian aviation sector
are given in Table 9 below.
Table 9: Investment plans in Indias aviation sector
Company
Plans
Estimated costs
Tata Advanced System

Limited
Helicopter manufacturing at the

Aerospace Special Economic Zone near
Hyderabad international airport
113.63 million
Global Vectra Helicopters
Increase its fleet and consolidate

its operations in dedicated offshore
transportation
130 million
Boeing Co.
Delivering 100 planes
17 billion
Source: N.N. (2009c). http://www.ibef.org/industry/aviation.aspx, 15.11.2009
Also for EU companies, the Indian aviation sector seems to be worth a potential
in investments. The Siemens Projects Venture, Germany, together with L&T and
Unique Zurich formed a consortium and hold about 17% stake developing the
Bangalore International Airport Ltd.119
A further successful example of a bilateral investment in the Indian airports is of
Fraport AG. Fraport AG in a consortium amongst others with GMR, holds a 10%
stake in developing the Delhi Airport. Its noticeable experience in the development
and management of airports globally could be advantageously used in the Delhi
airport development project. 120
Aims of the projects are amongst others the creation of an infrastructure able to
handle about 280 million passengers and therewith a growth in passenger traffic
of over 15% in the following 5 years. Additionally, handling of more than 3.3 million
tonnes of cargo traffic and therewith an envisaged growth rate of more than 20%
should be possible.121
119 see Parera (2009), p. 93

120 see Parera (2009), p. 94
121 see N.N. (2006d), p.1
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5. Indian Waterways
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5.1 Progress and Current Situation of Seaways and

Ports
India possesses round about 14,400 km of inland waterways of which more than
3,600 km are navigable by large vessels. However, only 2,000 km of them are used.
With the aim of developing water navigation and maintenance or conservation,
3 of the inland waterways have been pronounced as National Waterways: the
Allahabad-Haldia part of Ganga-Bhagirathi-Hooghly rivers with about 1,620km,
the Sadiya-Dhubri partition of Brahmaputra River with 891 km, as well as the
combination of western canals with 205 km. In general, the transportation potential
is underused.122
The ports in India handled about 519 million tonnes of cargo in 2004-2005. This
constitutes a growth of 11.8% compared to 2003-2004. There are 12 major ports
in India, six each on the west and east coast that together handled 383.75 million
tonnes, which is around 75% of the total sea-borne traffic. Almost all major ports
are administered by the government except for one -Ennore. In addition, there are
187 minor ports along 7,517 km of Indian coastline , as well as seven shipyards under
central governmental control, 2 shipyards under the control of state governments
and 19 private ones.124
Regarding the freight, nearly three-quarter of the traffic in the major ports are dry
and liquid bulk, like coal, iron or crude oil. The remaining traffic is general cargo
and containers, growing at a rate of 14% over the last half decade. The cargo that
is handled at Indias major ports is 75% of the total traffic and has increased over
the last 3 years at 9.5% annually. All in all, the international trade is handled up to
about 95% by volume (and 70% by value) by the major ports and a number of the
other ports.125
122 see N.N. (2004), p. 14

123 see N.N. (2006a), p. 3
124 see N.N. (2004), p. 14
125 see N.N. (2006a), p. 2ff
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Figure 8 shows the development of traffic growth in Indian ports during the last
few decades.
Figure 8: Traffic Growth in Indian ports
mmt
400
350
300
250
200
150
100
50
0
Major Ports
Non-Major Ports
Overall
1980-81
1990-91
1997-98
1999-2000
Source: Singru (2007), Profile of the Indian Transport Sector, p. 3. / Vaidyanathan, (2007), Current Status of
Logistics in India, p. 16.
Table 10 gives an additional overview of the development of the major ports and
the length of useable waterways, since 1980.
Table 10: Profile of Indian Ports and Waterways, since 1980
Parameter
Unit
1980-81
1990-1991
1997-98
1999-2000
No. of Major Ports:
number
10
11
11
12
Inland Waterwayslength of navigable

waterways
km
14,544
14,544
14,646
14.646
Source: Singru (2007), Profile of the Indian Transport Sector, p. 3
By the year 2000, approximately 102 shipping companies were operating in India.
Five of them were owned by private players based in India and one single company
was government owned, the Shipping Corporation of India. Regarding the ships,
there were about 640 ships including those owned by the Indian government
having 91 oil tankers, 70 dry cargo bulk carriers and 10 cellular container vessels.
In the past, the Indian government controlled and dominated the maritime
activities. However, the current indications are towards the private sector leading
in the development and operations of port activities. Hence, the sub sector ports,
has experienced significant investments by major global operators in the ports
business. Effects can be seen for example in some major ports now acting as
landlord ports or in minor ports which are to some extent already developed
by domestic and international private investors, as Pipavav Port by Maersk and
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Mundra Port by Adanai Group. Above all, the growing merchandise exports and the
increasing demand involved with it makes it necessary to invest more and more in
infrastructure of ports.126
Maybe, ports have the best potential for wide-ranging investment and modernisation
in India, besides telecommunication and roads. The countrys efforts to modernise
the infrastructure of ports got a quick start with the first private international
container terminal ever in India, the Nhava Sheva International Container Terminal
(NSICT).127
5.1.1 Major Ports

There is high traffic congestion at several ports. The Major ports which are important
to handling the increasing international traffic will be specified below.
At first, there is an artificially-made, all weather harbour; Chennai Port. It has a
wet dock and boat basin on its outer harbour, with a twenty-four-seven navigation
facility. Recently, it is rapidly appearing as a hub port and has connectivity to the
road from Channai to Kolkata, from Chennai and Dindigul, as well as connectivity
to rail to reach the southern parts of Tamil Nadu and the rest of India.
Moreover, in 2005-2006 47.25 million tonnes of traffic, above all iron ore, coal, cars
and sugar were handled at a capacity of 48.80 million tonnes annually. 128
Another all weather port is the Cochin Port, more and more developing into an
important maritime gateway to India. Two bridges, on the Mattanchery Channel
and on the Ernakulam Channel, build the road connectivity from the mainland to
the port. Also a single rail line from Shornur-Trivandrum to Ernakulam goes to the
Cochin Port. Concerning the transported freights, Cochin Port handles mainly all
the trade of tea, spices and coffee. In 2005-2006, about 13.94 million tonnes were
handled, against a capacity of 19.35 million tonnes per annum.
The Ennore Port is the first major corporate port in India and recently is a landlord
port with only coal being transported. Ennore Port has road and rail connectivity
and a traffic of merely 9.17 million tonnes in 2005-2006 against a capacity of 13
million tonnes a year.
The largest container handling port dealing with more than half the national
container traffic, is Jawaharlal Nehru Port (JNPT) in the south of Mumbai Port
where, two out of three terminals are operated by private players. This port hub is
connected with Mumbai- Pune expressway as well as with Mumbai-Goa highway
to western India. A rail connectivity to Panvel is also given. In the year 2005-2006,
against an annual, new capacity of 36.1 million tonnes, it handled 37.35 million
tonnes of traffic.
126 see N.N. (2006a), p. 2ff
127 see N.N. (2006a), p. 2ff
128 see N.N. (2006a), p. 9f
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The Kandla Port is located in the well developed Gujarat State on the west coast
of India. It constitutes a gateway to the north western part of India with access
to huge hinterland up to Jammu and Kashmir. The port is also connected with the
big cities of Mumbai and Delhi by rail. Iron, steel and salt are the major freights
transported. In 2005-2006 the Kandla Port utilized almost its entire annual capacity
of 46 million tonnes.
Under the Kolkata Port one should understand the Kolkata Dock System and the
Haldia Dock Complex. The first mentioned is a riverine port, constituting a gateway
to the eastern part of India. Its connectivity by road and rail is well pronounced,
e.g. through city roads, national highways connecting the port with the airport.
The general cargo and other traffic handled in 2005-2006 was 10.61 million tonnes
against 12.60 million tonnes of total capacity. However, Haldia Dock Complex
transports above all fertilizers, minerals and thermal or coking coal, exceeding its
annual capacity of 42.20million tonnes, in 2005-2006.
One of the first natural harbours of the world is the Mormagao Port also on the
west coast of India. About 32% of Indias iron ore exports are handled fromthis
port. A connectivity by road and rail is given. The yearly capacity of 29.50 million
tonnes is insufficient to cope with the high demand.
In the commercial capital of India, the Mumbai Port has a natural deep harbour
with three dock systems and 50 berths. Various national highways and Indian
Railways build the connection to almost all parts of India. There, pulses, sugar and
electronics are transported at a recently enhanced capacity of nearly 44 million
tonnes a year. 129
At Panambur, Mangalore, the artificial New Mangalore Port is situated. While
having connectivity to the industrial hubs of Southern and Northern India through
broad-gauge railway line and diverse national highways, about 38 million tonnes of
traffic, mostly food grains, can be handled annually
The Paradip Port, situated in Orissa, the state which is developing into a steel
production hub has a high potential for growth. State and national highways build
the connectivity to iron ore mines and steel plants and further rail lines are under
construction. However, the capacity of 51,40 million tonnes of cargo per annum is
only utilized up to about 60%.
The Tuticorin Port, is located in the eastern part of India and is considered as
being the best south Indian gateway port with connectivity by road and rail to the
big cities. Palm oil and raw cashews are some of the freight handled there at a
total recent capacity of about 20million tonnes.
The top ranking port in India with an inner and outer harbour and about 55 million
129 see N.N. (2006a), p.10f
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tonnes handled yearly is the Visakhapatnam Port. It is connected to a national

highway and the main railway line of the east coast. 130
Table 11 shows the major ports in India and the cargo handled by them. For the
Kolkata Port, the Kolkata Dock System and Haldia Dock Complex are separately
mentioned.
Table 11: Cargo handled by Major Ports
Trade
(04-05, MMT)
Container Traffic
(04-05)(million TEU*)
*Twenty foot equivalent unit
Chennai
44
0.62
Cochin
14
0.19
Ennore
9.5
Haldia
36
0.13
JNPT
33
2.37
Kandla
42
0.18
Kolkata Dock System
10
0.16
Mormagao
31
0.01
Mumbai
35
0.22
New Mangalore
34
0.01
Paradip
30
Tuticorin
16
0.31
Vizag
50
0.05
Major Port
Source: N.N. (2006b). http://www.infrastructure.gov.in/port.htm
Summarizing, the west coast ports cope with more than three-quarter of total
container cargo of which almost 70% of west coast traffic is handled by Jawaharlal
Nehru Port Trust (JNPT).131
5.2 Potential for Growth and Projects

To handle the large and sudden increase in cargo traffic which grew as already
mentioned at round about 10% annually the ports in India focus more and more on
expanding their cargo handling capacity. In 2006, the aggregate handling capacity
was about 456.20 million tonnes annually, in the major ports, as against a demand
or traffic of 423.42 million tonnes in 2005-2006. However, the minor ports coped
with 150 million tonnes during the same period.132
130 see N.N. (2006a), p. 12f
131 Vaidyanathan, (2007), p. 14
132 see N.N. (2006a), p. 3
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The Governement of India, has different plans underway to bring the handling
capacity of the major ports, up to a level of 1000 million tonnes per annum by
2011-2012 per annum in order to cope with increasing international trade and to
smoothen the traffic flow. The aim is to boost the capacity by about 545 million
tonnes within the next 6-7years. One of them is the Sethusamundram project
which shall facilitate maritime trade through dredging of the Palk Strait in Southern
India. In order to expand and modernise the capacities of the Indian ports another
project, the National Maritime Development Programme (NMDP) has been
established.
Under the NMDP about $13.5 billion investment in the major ports and $4.5 billion
investment in the minor ports is required to improve their infrastructure within
the next 7 years. The government plans different measure to reach their goals
concerning the handling capacity:

Projects to develop the ports, like construction and development of berths

and jetties
Maintenance and upgrading of the cargo handling equipment at ports
Improvement of drafts while deepening the channels
Diverse projects concerning the connectivity of ports.133
Some investment examples are given in Table 12 and 13 showing the major projects
of the Jawaharlal Nehru Port and Chennai Port.
Table 12: Major planned Investments in Jawaharlal Nehru Port
Nr.
Estimated Costs
in US$ (million)
Name of the project
Deepening Channels/Berths
1.
Deepening and widening of Main Harbour Channel
177.78
Berth Development
2.
Extension of container berth by 330 m and other facilities
100.66
3.
Development of fourth container terminal
976.00
4.
Marine Chemical Terminal
936.00
Equipment Procurement/Modernisation
5.
Acquisition of new cranes
66.67
6.
Replacement of tugs
20.00
Others
3.
Infrastructure facilities for Warehousing etc.
79.11
5.
Infrastructure facilities for port based industries
42.67
Source: N.N. (2006a), p. 20ff
133 see N.N. (2006a), p. 2ff
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Table 13: Major planned Investments in Chennai Port

Nr.
Name of the project
Estimated Costs
in US$ (million)
Deepening Channels/Berths
1.
Deepening of Channels, Basin and Berths
31.77
Equipment Procurement/Modernisation
2.
Modernisation of Chennai Port
44.44
Others
3.
Creation of additional open storage yards by reclamation
44.44
4.
Multilevel stack yard for Automobile Exports
11.11
5.
Construction of Marina
66.66
Source: N.N. (2006a), p. 20ff
To finance these 276 planned projects for maintaining and improving the major
and minor ports, the government encourages the public-private partnership model,
including direct foreign investment up to 100% - like in the other sub sectors of
the transport and logistics industry. In order to provide common user infrastructure
facilities, the plan is to use public funds.134 Given these facts, 64% of the submitted
investments are expected to be financed by the private sector, particularly the
commercially viable projects like the construction of berths and operation of
terminals. Already 15 private sector projects are recently operational.135
Also EU companies are attracted to invest in the Indian port sector. An example for
this is Maersk, being a player who is already present in India in the context of the
Projects of Port Development initiatives e.g. at Gujarat.136
5.3 Challenges in the Maritime Sector

Congestion
The main problem or barrier for logistics companies in the maritime sector in India
is the congestion at over-burdened ports.137 However India has a long coastline
and its port system is not well utilized. The seaborne trade is handled to about 70%
by 2 of the 12 major ports. The 180 minor ports having infrastructure problems are
almost unused. Resulting from this is a long turnaround time which is lagging behind
other global ports. Further, even the larger ports cant support larger containerships
making about 25% of the shipping volume.138
134 see N.N. (2006a), p.4
135 see N.N. (2006a), p.4
136 see Parera (2009), p. 92
138 see Kilgore/Joseph/Metersky (2007), p.38
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Moreover, inadequate cargo handling equipments, frequent breakdowns and extended

clearance time for cargo, make it difficult to handle the increasing traffic at ports.139
Transhipment
Due to missing main lines, cargo containers from India take a high transit time
because they still have to go through a transhipment centre.140 Furthermore, due to
delays in loading and unloading, many larger shipping liners avoid the Indian ports.
This causes the Indian exporters to have to use ports such as Dubai and Singapore
to tranship which causes additional costs and delays in transportation.141
The lack of connectivity is a major problem for the ports. In addition, there is no
connection to the hinterland and no guarantee of fixed timings with the trains.142
Moreover, this sector is highly dependent on external operators such as shipping
lines and port terminal operators.143
Labour policy
Skilled labour for operating the equipment at ports and for administration is
scarce144 and among the Indian shippers there exists a lack of trust and awareness
concerning outsourcing of logistics. Compared to developed countries the volume
of outsourcing by Indian shippers still lies at a very low level of 10%. There exists
a scepticism concerning losing control of sensitive information when outsourcing
and there arre expectations of more visibility and the ability to a real-time tracking
system.145

141 see Mitra (2006) S. 5
145 see Mitra (2006) S. 5
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6. Urban Transport
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6.1 Development of Urbanization

The urban population of India almost doubled during 1981-2001, from 160 million
to 285 million, and is constantly growing. The size of cities has increased therewith
considerably. The growth of urban population was in the 1980s about 36% and
slowed down a bit in the 1990s with a decadal growth rate of 31%. Despite
the slowdown in urban dwellers, metropolitan cities had their upturn. From 5
metropolises, with more than 1 million inhabitants, in 1951, e.g. Mumbai, Delhi,
Hyderabad, Chennai and Hyderabad the number of metropolises raised to 35 in
2001 having huge growth rates, e.g. Dehli (51.9%), Surat (85.1%) or Pune (50.6%).
All in all, the metropolises accounted for a larger portion of total urban population
due to the decadal growth of these huge cities with at a rate of 34% and the 31%
decadal growth of urban population.146
Table 14: Progress of the Share of Indian Metropolises
Year
1981
1991
2001
Nr. of metropolises
(>5)
23
35
Share of metropolises (in%)
26.4
32.5
37.8
Source: Padam, Singh (2004), Urbanization and urban transport in India: the sketch for a policy, p. 27
The public transport system in India could not keep up with the increasing demand
of the past decades. Passengers turned more and more to personalized vehicles
rather than using the degraded bus services leading to traffic congestion.147
6.2 Current Situation of Urban Transport Systems

6.2.1 Travel demand
The range of urbanization varies from state to state. Transport is one of the factors
that contributes to that variation. The states with a high urbanization level also
present a higher economic development which implies a positive correlation
between those two characteristics.148
The travel demand of urban population increased over the years substantially. In
general, there are some specific factors that are responsible for that.
One is the increasing Indian population. Due to urbanization, the population size
of an area in India grows in two decades by itself.
The second factor is the average number of trips per person daily, i.e. the mobility

147 see Padam/Singh (2004), S.27
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rate. In India, the mobility rate continuously increases annually. To give an example,
the mobility rate in Delhi grew from 0.49 in 1969 to 1.10 in 2001. But also other big
cities in India witnessed such an increase in the average trip rate, e.g. in Mumbai
it was 1.26, in Kolkata it was 1.26 and in Ahmedabad 1.57 respectively.
The third factor, is the increasing trip length contributing to the travel demand.
It can be seen as a result of the physical expansion of the cities. Hence, for
example in Delhi the average trip length of 5.4 km in 1969 raised to 13.5 km in
2001. Additionally, there is an observed change in how the trips are distributed
within the different purposes such as work and education, etc. The trend in pattern
of trip distribution goes to more and more trips in urban areas because of jobs or
education. In Mumbai for example approximately, about 60% of the trips are being
made for work and 31% for education.149 As a Result, there is a huge increase in
demand for transport in Indian cities.
6.2.2 Potential for Urban Transportation

The urban cities account for 60% or more of the national Indian income, providing
many jobs to migrants from rural areas and are therefore important for the
development of the national economy and its growth.150
Hence, a certain mobility is required to maintain the productive efficiency and
transport is a significant factor in the functionality and effectiveness of an economy.151
If the transport system is poor, the domestic and international markets may be less
competitive.152
Provision of Public Transport
To ease the huge congestion due to the population increase, a greater use of public
transportation instead of personal vehicles is necessary. To achieve this, an increase
in capacity and an improved quality of the transport system is required. Moreover,
most metropolises have no rail transit system to handle intra-city movement so
that an enhanced need for bus services is necessary to meet the demand in public
transport.153
Therefore, an optimal share of mass transport needs to be developed, with
regard to the high population in the Indian cities. While the share of personalized
transport and para transit is above the desired share, the share of mass transport
is below the optimal range. In Delhi, the mass transit share between 1982 and
2001 stayed at 62% while the city has more than10 million inhabitants. Hence,
the mass transport should contribute to more than 75% of total travel demand
instead of merely 62%. In small and medium size cities, bus transport plays a
minor role in transport for urban inhabitants. Due to the absence of public mass
transport systems in these cities, intermediate public transport (IPT) is important
to match the travel demand. Therefore, the personalized transport modes such as
two-wheelers are common.154
149 see Padam/Singh (2004), p.32f
151 see Deb/Sundar (2001), p. 1
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153 see Deb/Sundar (2001), p. 1
154 see Padam/Singh (2004), S.32f
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6.2.3 Challenges Facing Urban Transport

Motorization
An increasing number of vehicles, as mentioned in chapter 1, and a resulting
congestion on the streets decreases the efficiency of urban transportation and
mobility in the form of lower speeds.155 Although the number of vehicles per capita
in India is lower than in other developing countries, the country has to cope with
delays, congestion and accidents, even more than some industrialized countries.
One problem is the over concentration of vehicles mainly in the Indian metropolises.
An example for the bad conditions in urban areas is Kolkata where, during peak
hours, the speed is at an average, about 10 km/h, which indicates a waste of
time and energy. Another example is Mumbai, where the average utilization of
a suburban train exceeds 4000 passengers at a real maximum capacity of 2600
passengers. Such a mismatch of supply and demand can be seen in almost all Indian
cities. For the Indian metropolises there are even estimates of a demand of about
80 million trips againstt a supply of only 37 million trips that can be provided by
rail and bus mass transport. Additionally, the constantly growing urban population
creates a further need for transport capacity, e.g. a growth of 1 million inhabitants
in a metropolis generates a need for 3.5 4 million extra trips.156
Urban Transport Infrastructure
Compared to the developed countries, the space used for transportation in cities
is very small. As mentioned earlier, the road space is not adequate. Moreover, the
major roads in Indian cities are occupied by parked vehicles. As a result, the road
space which is already insufficient is even more restricted.157
The urban mass transport systems are hardly maintained. The existence of rail
services is rare. Kolkata has a passenger rail or metro system, in Chennai there
exists a rapid transit system and some suburban rail networks are available in
Bangalore and New Delhi.158 The bus transit is the main public transport system in
the metropolises and in some smaller cities it has never been developed to be an
efficient mode of transport.
All in all, the available urban transport services are unreliable, tardy and
overcrowded so that using them is not very comfortable. Due to this, the people
shift to other transport modes, such as personalized vehicles, e.g. two-wheelers
and intermediate public transport modes, e.g. taxis or auto-rickshaws. In Indians
metropolises these intermediate public transport modes constitute a replacement
for buses and suburban rail.159
155 see Deb/Sundar (2001), p. 1f

158 see N.N. (2004), p. 13ff
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Urban Road Safety

India, as well as other developing countries face serious road accident problems.
Those accidents cause costs up to 1% of GPD per year that India cannot really
afford.160 In 2002 alone, there were about 85000 road accident deaths in India.
Figure 9 below, illustrates that all of the metropolitan cities in the sample, showed
a high number of accidents in the year 2000.
Figure 9: Road accidents in Indian metropolises in 2000
30000
25000
Accidents
20000
15000
10000
5000
0
ba
a
ed
Ah
Ba
lor
a
ng
ai
nn
e
Ch
lhi
De
ba
ra
de
Hy
ata
lk
Ko
ba
um
Source: Padam, Singh (2004), Urbanization and urban transport in India: the sketch for a policy, p. 36.
The main victims in these accidents are cyclists and pedestrians. A huge proportion
of this are the poor people, walking or cycling, that live in urban areas and cannot
afford the costs for public transportation. Hence it is necessary to make public
transport available especially to the poor, in order to provide them with certain
safety on the roads for cycling and walking.161

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7. Logistics in Private Sector
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7.1 Importance of Logistics (in India)

Since Logistics is a holistic, integrated part of each company, an efficient management
of this is really needed to be competent in the global market situation.
Whether a company functions successfully, is related to its logistics management
technologies since the end-user also determines his satisfaction by good logistics
management. Contributing to this, are performance indicators, optimization
techniques and logistics software to build a corporate logistics system for customers
and suppliers. An understanding of the technologies in these areas is a chance to
transfer well-versed technologies from Europe to India.162
The concept of logistics helps to leverage certain advantages existing with the
company. It is an integral effort to create costumer value at the lowest cost and
is related to getting products and services at the time and place where they are
needed to satisfy customer requirements. Hence, a clear understanding of the
customer demand is important to find a strategy to meet the expectations.163
Moreover, in logistics, it is a balance of service priority and costs and therefore
becomes a challenging operation within the business to implement the best
practice of logistics, involving amongst others integrated information, transportation,
warehousing and inventory. Material flows and product distribution are also one of
the logistical operations.164
The strategic management of the material procurement, movement and storage is
determined by Logistics. It is resolved in such a way that profitability is maximized in
the form of fulfilling orders cost-effectively.165 Thus, effective logistics management
provides for competitive advantages.166
7.2 Potentials in Logistics and Technologies

Logistics Service Provider Competitiveness through efficient Logistics
Due to the rise in manufacturing, retail and trade in India, the need of the hour is
efficient and competitive service from logistics service providers (LSPs) as well
as the system of outsourcing, that is third party logistics (3PL). These services
consist of diverse operations. Some of these operations are material handling,
warehousing, inbound and outbound logistics.167
162 Balachandra/Matzner (2005), p. 1

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Characteristics of the operations done by the logistics service provider are:

Involving multiple parties, e.g. in 3PL services

Contracting and Vendor Management
Scheduling and Coordination
Monitoring and Information Sharing
Transportation: route and transport mode planning, vehicle placement
Warehousing: planning of resources, forecasting of demand
Use of scientific tools168
They are improving their efficiencies through initiatives, processes and monitoring
systems. With this they are able to maximize their competitiveness. To achieve
this competitiveness among logistics service providers, an improvement in the
operations is needed. The logistics service providers are able to run with costefficiency and can offer value-added services at competitive prices, providing value
to their customers and shareholders.Their operation can be monitored and controlled
uniformly. LSPs may have impact on vendor management processes helping to
ensure relationships that are beneficial and constitute competitive advantage.169
Currently, third-party logistics account for almost a quarter of Indias transport
industry and its market is expected to grow in the next years up to $3.6 billion by
large investments in automotive and telecom manufacturing. A 3PL example is
Menlo Logistics that is not only organising distribution but also offering assembly
and manufacturing manpower. Also, real-estate developers in industry such as
Prologis and Aeroterm have entered the market. Since 2005, where the Value
Added Tax was partially introduced, Indias transport and logistics industry as well
as other industries are expected to move more and more towards the use of 3PL
services benefiting large warehouses in hub cities. These are investments that
companies expect the service provider to make.170
IT and Technology
The Indian Institute of Science conducted a survey and made a demand analysis
in this sector to understand the technologies adopted by Indian companies as well
as to show the gap in the technologies, thus constituting a potential for transfer
of technology from Europe. They also conducted a case study with some selected
companies in India in order to identify the used technologies, the problems they
were coping with when adopting advanced technologies as well as the areas
where demand for technologies exists. Additionally, the problems that have to be
overcome when doing a technology transfer and the solutions for such problems
were studied.171 This gives an insight into the relevant areas in logistics that could
be processed and made available to companies in India to enable them to become
competitive and to facilitate bilateral cooperation.

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Participating in this survey were amongst others, companies from the automobile
sector in Mumbai, Pune and Delhi. They regularly evaluate and review the quality
of their logistics services in customer delivery and also share customer complaints
regarding their logistics services. The companies are quite flexible to the demands of
customer delivery requests. Since most of the companies outsource their logistics
to a service provider, they regularly analyze these services, for their profitability
and feasibility in ancillary areas like distribution, transport and return management.
JIT, JIS and warehouse concepts are familiar to most of the companies and are
being regularly used. Majority of the companies practice cooperation/networks
with other companies to reduce logistics costs.
From the study it is identified that there are quite a number of companies that
have the potential for technology transfer. Various technologies which can be
incorporated for the enhancement of the logistics services are listed below.172

JIT, JIS and warehouse concepts.

Collaboration with the customers in inter-company planning process.
Logistics planning incorporated in the companys target system.
Integration of SCM in ERP.
Participation in electronic market places.
Online inventory management.
Electronic Data Interchange (EDI).
Utilization of supply centers.
Complete IT integration.
Barcodes and RFIDs.173
Use of logistics target system, such as balanced scorecards tailored to the companys
needs is a potential area. State-of-the-art logistics planning tools can be implemented.
Knowledge about the advantages of cooperation/networks, IT integration and
implementation of barcodes has to be acquired. Use of SCM tools is also one area
of potential for technology transfer. Some technology has to be thought of in the
field of vehicle tracking system, as the geography is a very complex one. Further,
use of cooperation/networks with other supplier companies to combine volumes
in logistics process can be one of the potential areas. Often, a good scope for the
implementation of real time tracking facilities can be seen as they feel a two-way
communication is the need of the hour. The skill level of the suppliers has also to be
improved. Global Positioning System (GPS) is one of the technologies that should be
implemented. Cost effective and beneficial training is necessary.
Real time tracking system is what the companies are looking for. They also look for
logistics service providers, as mentioned before, who can handle large volumes
especially when there is an increase in production. EU companies can cooperate
and also educate them with the advantages of merging their demands with key
suppliers and joint stock management with their suppliers. RFID is another potential
172 Balachandra/Matzner (2005), p.60f
173 Balachandra/Matzner (2005), p:60f
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area for technology transfer. The most needed technologies are those that could
reduce the inventory and lead times. Even if too many new technologies can not
be implemented, efforts could be made in improving the existing technologies.174
A gap analyse for this sector was made to observe the potentials due to high
demand.
Figure 10: Gap analysis- Automobile Sector
50
45
40
35
30
25
20
15
10
5
0
Gap in %
Performance
Indicators
Optimization
Concepts
Optimization
Measures
IT Deployment
Source: Balachandra/Matzner (2005), p. 116
From the above graph it is evident that in the automobile sector there is a
considerable gap in IT deployment. Also, there is a significant gap for optimization
concepts and measures which indicate that there is a potential for training and
technology transfer.175
In Addition, since the Indian market is only slightly penetrated by PCs and internet,
it provides the IT companies an opportunity to explore the potential.176
This shows a high potential for the future of technology transfer of logistics
technologies between Europe and India. Much can be learnt from the experiences
of both countries. India has a vast experience in currently used logistics technology
and practices. Europe is advanced with R&D in logistics technology.177
Currently, there already exist Indo-EU investment projects for example
with SAP, Germany. The SAP Labs India is a global development hub of SAP
Germany contributing to the product value chain areas of SAP. Further, the
British IT company Xansa is located in India with 3000 employees and wants
to increase it even more. Another example is the TCS that bagged an IT
outsourcing contract from Volkswagen. 178
174 Balachandra/Matzner (2005), p:62ff

175 Balachandra/Matzner (2005), p.116
176 see Parera (2009), p. 87
178 see Parera (2009), p. 87
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7.3 Challenges in Logistics services

Nascent Stage of LSP
The market for third party logistics is rapidly increasing and has to cope with
different challenges. One of these challenges is the lack of infrastructure, e.g. the
fragmented warehousing and cold storage chains.179 Further, through the huge
number of unorganized private operators, as mentioned, economies of scale
cannot be realized.
Last but not least, since processes and automated monitoring systems
are not efficient or technologically advanced it also imposes a challenge for
outsourcing.180
Warehousing
In India, there are no real existent warehouse standards, no set-up for distribution
centres or standards for suppliers.181 Further, local clearing and forwarding (C&F)
agents usually manage warehouses, but the warehousing structures are very
fragmented and the facilities are small due to the poor knowledge of warehousing
technology.
Also, the warehousing practices are not very well known, so companies often
percieve an increased risk of cargo damage or pilfering.
Third Party Logistics (3Pl) providers often complain about the difficulties in
obtaining land to build warehouses. They often cannot offer warehousing services
by themselves and if they cannot get land, that hinders them to provide their
logistics services. Warehouses would be most efficient near airports or seaports
but land is not easily available to private companies in these areas. Therefore,
warehouses often are smaller than planned because of these problems to acquire
land in India.182
In addition to that, companies entering the market have to build their own
infrastructure including supply of electricity, water and road access.183
Limited Technology Basis
The study conducted by the Indian Institute of Science also identified some
challenges mentioned below that may hinder the technology transfer.
Most of the companies surveyed are still of the opinion that logistics means only
transportation. They are unaware of the latest technologies involved in logistics.
Most of them follow certain techniques that are conventional and they need to be
convinced on how technology transfer can improve their companys performance
and how it will enhance their return on investment. Yet a few of them feel that
upgradation of technology is not the need of the hour because the infrastructure in
179 see Ramaswamy/Srinivas (2009), p. 4f
180 see Ramaswamy/Srinivas (2009), p. 4f
181 see Kilgore/Joseph/Metersky (2007), p. 38f
182 see Ganguli (2008), p. 18ff
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the country is not mature enough for the companies to adopt high-end technologies.
The basic factors like road, IT backbone and taxation are major barriers for a
company.184
Majority of the companies mainly rely on the software that is developed in-house
for logistics and have also integrated logistics in the companys target system.
However, there is no seamless flow of information and customization in this area
and therefore this would be a potential market for tailor made software.185
Logistics Infrastructure and Supply Chains
Due to poor condition of roads, inefficient ports and scarce distribution infrastructure,
Indias supply chains rely on a slow transit network. Further, the lack of next-day
deliveries for transport companies managing nationwide networks and unlimited
distribution channels, hinders the logistics development and therewith the countries
growth. Moreover, logistics costs are extremely high.186
184 Balachandra/Matzner (2005), p. 114f

185 Balachandra/Matzner (2005), p. 114f
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8. Summary of the main

challenges and opportunities
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8.1 Facing challenges

All in all, a citys efficiency depends on the development of a functional transport
system. As mentioned before, the Indian transport system faces some challenges
but at the same time, also offers some potentials. The main problems in India are
congestion, delay, accidents, wastage of energy and air pollution, implying high
costs.187
8.1.1 Natural Challenges

Energy, Natural Resources and Pollution
The strongly increasing population and urbanisation, as well as motorization in
India imposed tremendous pressures on the natural resources of India, i.e. energy.
Moreover, it is expected that the Indian growth will reach an energy consumption
of 4 times the current value in 2030.189
The largest part of the energy demand in India is fulfilled by coal and fossil fuel.
About 70% of the electricity supply in India comes from coal.190 Figure 11 indicates
the division of the electricity production.
Figure 11: Indian Electricity Production 2006
Source: Balachandra/Matzner (2005), p. 116
However the Indian energy sector matches only 90% of the required energy. India
suffers from energy shortages and there exists an inadequacy in the energy supply
that has to be balanced, e.g. through energy imports. An estimation of the peak
shortage of power is about 13-14% and large areas are without power for long
187 see Padam/Singh (2004), p.39,
188 see N.N. (2009), p. 1
189 see Wish (2007), p. 1

190 see N.N. (2009b), p.1
www.ebtc.eu
periods.191 Further, the reserves of the energy resources are reduced more and
more and in contrast, the energy prices keep rising and are at 8-10ct/unit at the
moment.192 Since India has to import large quantities of fuel at high prices and fuel
accounts for 83%193 of Indias carbon dioxide emissions, alternative energy and a
proper energy management system is needed to meet all the demand and to avoid
or to deal with a potential energy crisis.194
Also the huge air pollution caused due to the high vehicle growth especially in the
urban metropolises explains the need for alternative energies, e.g. diesel with low
particle emission to match the international emission norms.195
Moreover, in terms of climate change, India has to cope with environmental
challenges such as the greenhouse effect.196
Why Care about Climate
Change?!
Challenges:
Erratic supply of water and electricity
Wastage
Air Pollution
Greenhouse Gas Emission
Climate Change
Global Warming
Precipitation and Humidity
The phenomenon of climate change

may have harmful effects on Indians
economy. These are mainly with
regard to the sea level, agriculture,
rural development and generally
the occurrence of extreme events
which will lead to adverse impacts
and possible threats or challenges
197
for the country in the long run.
Since coal is the particular resource for energy
relating to the climate change, India needs to change the coal-based energy
strategy, as mentioned above. This change in energy sources may be expensive
but necessary.198
The risk of lower agricultural production due to the effect of global warming on
agricultural crop yields, leads to significant losses e.g. for rice and wheat and hence
farm revenues, which also constitutes a risk for GDP growth and welfare. For India
as a developing country, this can be the cause for misery for its people.199
Also, the risk of a rising sea level implies high emigration from coastal regions and
an infiltration of sea water into the ground water may cause a risk to the economy.
Additionally, the risk of increasing extreme events, e.g. cyclones or monsoons may
lead to serious effects in water and power supply, loss of property or even deaths.This
will also have an impact on instability in housing and infrastructure such as roads.200
To sum up, India may be highly affected by the climate change. The food production
could be affected, a large number of people could be displaced and extreme
191 see Parera (2009), p: 42
192 N.N. (2006e), p.1
193 see N.N. (2009b), p.1
194 see N.N. (2009e), p.
195 see N.N. (2009), p.1
197 see N.N. (2009b), p.1
www.ebtc.eu
198 see Parikh/Parikh (2002), p. 5f

199 see Parikh/Parikh (2002), p. 5ff
200 see N.N. (2009b), p.1
63
64
events could occur more often. Hence, the development of the economy may
be hindered through those impacts and progress of improving poverty may be
retarded.201 Recent IPCC reports indicate India as having the greatest increase
in energy and greenhouse gas emissions worldwide when sustaining the high
economic growth numbers. Further, the International Energy Agency suggests
that India could become the third largest greenhouse gas emitter by 2015.202
8.1.2 Industrial/Economic Challenges

As mentioned in the earlier chapters,
the transport sector in India faces
different challenges. The increasing
High tax levels
population and rising incomes call
Under-developed infrastructure
for a higher demand in mobility
Congestion
and hence create a high level of
Delay
motorization of personal vehicles.
Accidents
The result is a huge congestion on
High cost of capital
roads, rail and ports as well as an
Upgrade of technical and managerial
increasing air pollution and energy
skills
waste caused by high numbers of
vehicles and low average speeds
of around 10 km per hour during peak periods and long waiting times at traffic
lights. Further, a lack of safety on the roads through the absence of or poorly
maintained footpaths, related to a high number of accidents, generates a challenge
in the Indian transport sector. In urban areas, lack of sufficient and reliable public
transport system, leading to an over-crowded mass transport system, constitutes
a problem for the mobility of the passengers. All in all, this leads to significanly
poor use of roads and infrastructure investments.203
These challenges may increase with further growth in the Indian population and
reduce the business efficiency and competitiveness as well as the quality of life of
the Indian inhabitants.204
Challenges:
To sum up this chapter, limitations in physical and communication infrastructure,

play a key role in almost all the sub sectors of the transport and logistics industry
with regard to industrial and economic barriers. Meeting deadlines for international
customers is mostly impossible for exporters coping with slow cargo movement
because of bad road conditions, huge documentation requirements and a lot of
check posts, as well as acute congestion at seaports due to lack of dedicated freight
corridors. Often, freight has to be booked as airfreight to handle the increasing
sea freight and to expedite shipments hence resulting in higher costs and lower
international competitiveness.205 However, market access barriers are rare.206
201 see Parikh/Parikh (2002), p. 5ff
202 see N.N. (2009b), p.1
205 see Mitra (2006), p. 6
206 see Ganguli (2008), p. 33
www.ebtc.eu
8.2 Opportunities for India and EU

8.2.1 Opportunities for India
The increase in trade of textiles, handicrafts or packed food imply an increase
in demand, above all in containerization services. Hence, there exists a huge
potential in this new greenfield market.207 Also due to the growing economy and
GDP, more outputs there is a rise in demand in transport and logistics services.208
The immense potential of the transport and logistics industry attracted numerous
Indian corporate companies, e.g. Tata and Reliance Industries. They established
divisions and implemented the provision not only of in-house logistics services but
also services to other corporates.
Further, the Transport Corporation of India (TCI) and Blue Dart, constituting
express cargo and courier enterprises, used their advantage of being already well
established in the Indian market and having a large, existing distribution network,
to became operational in logistics. Others with distribution networks are also
foraying into business and the interest among entrepreneurs wanting to venture
into this business grows more and more.209
Potentials in Railways
The high congestion on the roads and the limited margin for excavation creates
opportunities and potentials for competing facilities to develop. For a better use
of the rolling stock and the capacity on the tracks, having double stacked trains
is a potential that can be seen in the current situation. Running them would also
imply lower haulage charges. With additional capacity for container handling, a
higher container query and therefore a further growth in container trade would be
possible.
Another potential in the railway sector is the existence of private container trains to
provide a smooth handling of high volumes and to overcome the lack of hinterland
connectivity with regard to Indian ports.210
Further examples to be able to cope with the growth in trade and containerization
are, e.g. the Golden Quadrilateral project, as well as the east-north and south-west
corridors to connect the metropolises, as mentioned in the earlier chapters.
Opportunities in the Financing Policy
Also the allowance of 100% Foreign Direct Investment in Special Economic
Zones (SEZ) and Free Trade and Warehousing Zones (FTWZ), as well as public
208 see Mitra (2006), p. 7
209 see Mitra (2006), p. 7
www.ebtc.eu
65
66
private partnerships (PPP) in infrastructure development are expected to boost the

investments from domestic as well as foreign companies- in the transport and
logistics sector.
Presently, most of the large global logistics companies have their presence in
India. They are particularly present in the form of freight forwarders and have tieups with Indian companies concerning domestic transportation. As an example,
in 2004 DHL Danzas, the leading worldwide provider of freight transportation and
related logistics services took over Blue Dart211 and acquired it to cover about 13000
locations in India. Also TNR and Fed Ex are entering the market with success to
create global networks.212
Opportunities in Indian Energy Policy
The Indian energy policy including mass energy conservation and efficient use
of it, states several energy zones to harvest energy on a large scale and a shift
from non-renewable to more efficient renewable resources. This implies that the
current dialogue of energy being a huge potential for India is an important measure
to avoid wastage and could develop into a big industry. India has even established
an energy conservation building code to meet energy performance standards.213
In addition to this, a further potential can be seen in the independent industry
of alternative and renewable energy that attracts investments not only from
the government but also from individual companies.214 The implementation of
renewable energies has a large scope in countries like India suffering from energy
shortages.215
One alternative to coal may be natural gas. Hence, to use this substitute resource,
it is necessary to change infrastructure for its distribution, which is a potential
opportunity as well.216 Additionally, India also considers bio-diesel and hydrogenfuelled vehicles as an alternative source of energy.217 In the renewable sector, there
are already domestic companies such as Suzlon Energy and Tata- BP Solar making
investments in large scale products across India.218
8.2.2 Industry Potential for EU Companies

Recent Global trends increased business opportunities between India and EU.
Spends in infrastructure and huge investments make way for India and the EU to
fix the potential in a multitude of sectors. These investment perspectives in the
Indian industry are possible through the allowance of privatization amongst others
in the Indian transport and logistics sector. Hence, there exist promising sectors in
India with potential investment opportunities for the EU companies.219
211 Mitra (2006), p. 7
213 see N.N. (2009e), p. 1
214 see N.N. (2009e), p. 1
215 see Parera (2009), p. 42
216 see N.N. (2009), p. 1
217 see Parera (2009), p. 43
218 see Wish (2007), p. 1

219 see Parera (2009), p. 34
www.ebtc.eu
Research & Development

Since India is an attractive destination world-wide as a Research and Development
location, especially with Indian companies drawing on local engineering design
capability, many companies have already set up their bases for R&D in India.
Hence, a high potential for the future of technology transfer of logistics technologies
between Europe and India exist. Much can be learnt from the experiences of both
countries. India has a lot of experience in current run logistics technology and
practices. Europe is advanced with R&D in logistics technology.220
Further, a high number of auto and engineering companies such as Bosch,
Volkswagen an MAN having their international purchasing offices in India and use
the Indian regions to source its components.221
Energy and Emission Slow-Down
The support in renewable energy has the potential to reduce Indias dependence
on carbon-emitting fuels. Hydropower and new energy such as solar and wind
power could lower this dependence.222
In the field of hydrogen vehicles a technical Indo- EU- cooperation may be seen.223
Already existing inbound deals in the energy sector consist e.g. with the Italian Eni
Spa targeted as Hindustan Oil Exploration Co and outbound deals e.g. with the
Britain Oil and Natural Gas Corp. Ltd.. 224
The Britain BP built in 1989 a Joint Venture with the Indian Tata to form TataBP
Solar. Further bilateral investments are shown in the following table.
Table 15: Indo-EU Projects
Company - Country
Project Details
Caim - UK
with ONGC for Barmer fields, Rajasthan
Norsk Hydro Norway
ONGC tied up with Norsk Hydro

Produksjon AS, to develop Deepwater Oil
& Gas blocks off the Indian coasts
Shell Netherlands
Shell sells lubricants in India; Earlier it had

a JV with BPCL
Source: KPMG; India Calling 2009 p. 59

221 see Parera (2009), p. 34
222 see Kumar (2007), p. 12
223 see Parera (2009), p. 43
224 see Parera (2009), p. 33f
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67
68
In addition to this, potential for a collaboration with the EU in R&D work are the
Zero Emission Power Plant with Carbon Capture and Storage (CCS) as a solution
for carbon emissions and more efficient supercritical steam cycle technology
plants.225
The rise in vehicle emissions from the transportation sector may be slowed-down
through different ways:

Shift from road to rail transport

Higher confidence in public transport
Improved efficiency standards.
The experiences of the EU in this sector could enormously help India and offer
high values for the industry.226
Logistics Management and Transport
Additionally, road and trucking operations, port management and management of
warehouses are proposed sectors for a co-operation between India and the EU.
Also a collaborated training and development of skills with the logistics- dominant
EU would represent an advantage for India.227
Manifold potential in sub-sectors of the transport and logistics industry are also
expected from the Indo-EU Trade and Investment Agreement (TIA) such as in road
freight, support in all modes of transport as well as in non-freight logistics.
Transport and logistics are closely related. Therefore, an optimal use of transport
infrastructure is required to be able to provide efficient logistics.228
Companies are not able to manage transport and logistics in India from their
offices for example, in Amsterdam. Therefore, they will also have to build a physical
presence in India. An example for that is Samsung, having successfully entered
India with an experienced operating team and being familiar with regional service
providers and regulations.229
225 see Kumar (2007), p. 11

226 see Kumar (2007), p. 12
www.ebtc.eu
Conclusion
Despite the immense growth of Indias economy, according to the global retail
opportunity index, it is the greatest underserved market having significant
opportunities for companies waiting to invest in this market.230
As mentioned in the first chapters concerning the sub sectors in transport and
logistics industry, reforms and plans to improve the road, rail and maritime sector
are already in the pipeline. These regulations shall improve the transport and
logistics industry and make it more competitive.Thus, reforms for each mode of
transport have to address different barriers:231
In the road sector, the problem of inter-state movement of freight and the
fragmentation of the structure have to be addressed. In the railway sector, the
development of the dedicated freight corridor is projected to overcome this
barrier. Concerning sea transportation, connectivity between ports and the inland
transport network constitutes an important opportunity. Some reforms may be
mode-overlapping. All in all, an expanded capacity and upgraded technologies are
required for each mode of transport.232
If the regulations and improvements are not realized, it would lead to inefficiencies
in the Indian transport and logistics sector. Moreover, since logistics is entirely
dependent on modes of transport, it is necessary to improve them, e.g. through
liberalization and fair competition.233
Thus it concludes on a positive note that is a great future, for the technology transfer
in the logistics sector between Europe and India. Much can be learned from the
experiences of both countries. India has a lot of experience in current run logistics
technology and practices. Europe is advanced with R&D in logistics technology.
Consultants will help bridge the gap between Europe and India with respect to the
success of transfer.234
Hence, there exist promising sectors in India with potential investment
opportunities for the EU companies. For example, in the field of hydrogen vehicles
a technical Indo- EU- cooperation may be considered. Additionally, road and truck
operations, port management and management of warehouses are proposed
sectors for a cooperation between India and the EU. Also a collaborated training
and development of skills with the logistics- experienced EU would represent an
advantage for India.237

235 see Parera (2009), p. 34
236 see Parera (2009), p. 43
www.ebtc.eu
69
70
References
Balachandra, P., Matzner, K. (2005). LOGINDIA Transfering Logistic Know-How To India
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Commission, LOGINDIA, IFF, Magdeburg.
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Central Statistics Office. Government of India. (2006)./ National Account Statistics/CMIE.
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Deb, K. , Sundar, s. (2001) Restructuring urban public transport in India. The Energy and
Research Institute, New Delhi.
Ganguli, D. (2008). Logistics Services under Indo-EU TIA. Indian Council for Research on
International Economic Relation.
Kilgore, M., Joseph, A., Metersky, J. (2007). The Logistical Challenges of Doing. Supply
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Kumar, R. (2007). Climate Change and India: Impacts, Policy Responses and a framework
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Airports in India. Available at: http://www.infrastructure.gov.in/airports.htm .
Mitra, S. (2006). Logistics Industry: Global and Indian Perspectives.
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http://www.infrastructure.gov.in/highways.htm .
N.N. (2006d), Airports. Available at: http://www.infrastructure.gov.in/airports.htm,
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N.N. (2006e), Power. Available at: http://www.infrastructure.gov.in/power.htm, 12.12.2009
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industries/ing/industries_ing.asp , 17.11.2009
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N.N. (2009b). How Climate Change affects India. Available at: http://www.
climatechallengeindia.org/How-Climate-Change-affects-India, 21.12.2009
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infrastructure-in-india/india-energy-sector.html, 11.12.2009.
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SKETCH FOR A POLICY. European Transport, no. 27, p. 26-44.
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71
EBTCs efforts focus on 4 key sectors Biotech, Energy,

Environment and Transport all of which offer enormous scope
for closer EU-India collaboration, be it in business, science or
technology. As the connecting platform between business,
research, and government, EBTC ensures that EU players are
well networked with a solid base from which to develop their
venture.
EBTC New Delhi (Head Office)

DLTA Complex, South Block, 1st Floor
1, Africa Avenue, New Delhi 110 029, INDIA
Tel: +91 11 3352 1500
Fax: +91 11 3352 1501
E-mail: delhi@ebtc.eu
www.ebtc.eu
New Delhi | Mumbai | Bengaluru | Kolkata | Brussels
European Business and Technology Centre, 2013.
The European Business and Technology Centre (EBTC)

supports EU companies and researchers on their market entry
to India by offering long-term hands-on support with a myriad of
services. With offices in Indias metros of New Delhi, Mumbai,
Bengaluru and Kolkata, EBTC is well placed to offer complete
end-to-end solutions to companies who want to enter and
flourish in the Indian market.
This publication has been produced with the assistance of the European Union. The views expressed in this publication are those of the
authors and do not necessarily reflect the views of EBTC or the European Union.
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Overview of the demand in

the Indian transport and

Overview of the demand in

2.1 Development and growth potential

2.1.1 Growth of vehicles

2.1.2 Growth in Road Length

2.2 Current Situation and future Projects

2.2.1 National Highways

2.2.2 State Highways

2.2.3 Rural Roads

2.3 Challenges in Transport by Roads

2.4.1 Natural challenges

2.4.2 Industrial/economic barriers

2.4 Potentials in Developing the Road Sector

3. The railway network in India

3.1 Development of the Rail Sector

3.2 Actual Circumstances

3.3 Improvements and Potentials of the Railways

4. Indian aviation traffic

4.1 Progress of Indian Airways

4.2 Current domestic and international traffic

4.3 Airlines in India

4.4 Potentials Creating Projects

Overview of the Demand in the Indian Transport and Logistics Industry

7. Logistics in Private Sector

8. Summary of the main challenges and opportunities

European Business and Technology Centre 

Overview of the Demand in the Indian Transport and Logistics Industry

Table 2: Profile of the Road Sector

Table 3: Logistics Costs in different Countries

Table 4: State Road Projects with Private Sector Participations

Table 5: Profile of the Railway Sector

Table 6: Load Capacities in different Countries

Table 7: Improvements in the operations of Indian Railways

Table 8: Airport Statistics in 2003-04

Table 9: Investment plans in Indias aviation sector

Table 10: Profile of Indian Ports and Waterways, since 1980

Table 11: Cargo handled by Major Ports

Table 12: Major planned Investments in Jawaharlal Nehru Port

Table 13: Major planned Investments in Chennai Port

Table 14: Progress of the Share of Indian Metropolises

Table 15: Indo-EU Projects

Figure 2: National Highway Development Program

Figure 4: Development of Aircraft Movement since 2001

Figure 5: Development of Passenger Traffic since 2001

Figure 6: Development of Cargo Traffic since 2001

Figure 7: Transport Profile Air India and Indian Airlines

Figure 8: Traffic Growth in Indian ports

Figure 9: Road accidents in Indian metropolises in 2000

Figure 10: Gap analysis- Automobile Sector

Figure 11: Indian Electricity Production 2006

European Business and Technology Centre

Overview of the Demand in the Indian Transport and Logistics Industry

European Business and Technology Centre 

Overview of the Demand in the Indian Transport and Logistics Industry

4 see N.N. (2004), p. 14

European Business and Technology Centre

Overview of the Demand in the Indian Transport and Logistics Industry

1. Transport and Logistics

European Business and Technology Centre

Overview of the Demand in the Indian Transport and Logistics Industry

7 see Mitra (2006), p. 4f

European Business and Technology Centre 

2.1 Development and growth potential

2.1.1 Growth of vehicles

2.1.2 Growth in Road Length

2.2 Current Situation and future Projects

2.2.1 National Highways

2.2.2 State Highways

2.2.3 Rural Roads

2.3 Challenges in Transport by Roads

2.4.1 Natural challenges

2.4.2 Industrial/economic barriers

2.4 Potentials in Developing the Road Sector

3. The railway network in India

3.1 Development of the Rail Sector

3.2 Actual Circumstances

3.3 Improvements and Potentials of the Railways

4. Indian aviation traffic

4.1 Progress of Indian Airways

4.2 Current domestic and international traffic

4.3 Airlines in India

4.4 Potentials Creating Projects

7. Logistics in Private Sector

8. Summary of the main challenges and opportunities

European Business and Technology Centre

Table 2: Profile of the Road Sector

Table 3: Logistics Costs in different Countries

Table 4: State Road Projects with Private Sector Participations

Table 5: Profile of the Railway Sector

Table 6: Load Capacities in different Countries

Table 7: Improvements in the operations of Indian Railways

Table 8: Airport Statistics in 2003-04

Table 9: Investment plans in Indias aviation sector

Table 10: Profile of Indian Ports and Waterways, since 1980

Table 11: Cargo handled by Major Ports

Table 12: Major planned Investments in Jawaharlal Nehru Port

Table 13: Major planned Investments in Chennai Port

Table 14: Progress of the Share of Indian Metropolises

Table 15: Indo-EU Projects

Figure 2: National Highway Development Program

Figure 4: Development of Aircraft Movement since 2001

Figure 5: Development of Passenger Traffic since 2001

Figure 6: Development of Cargo Traffic since 2001

Figure 7: Transport Profile Air India and Indian Airlines

Figure 8: Traffic Growth in Indian ports

Figure 9: Road accidents in Indian metropolises in 2000

Figure 10: Gap analysis- Automobile Sector

Figure 11: Indian Electricity Production 2006

European Business and Technology Centre

European Business and Technology Centre

European Business and Technology Centre

European Business and Technology Centre

European Business and Technology Centre

European Business and Technology Centre

European Business and Technology Centre

European Business and Technology Centre