BMI's Executive Summary

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The Indian economy is one of the fastest-growing in the world, but the boom is not without its stops, starts and bottlenecks, all of which make themselves felt in the country's freight-transport sector. In fact, according to a recent study by the Confederation of Indian Industry, the country needs US$330bn in infrastructure investment over the next five years to sustain its economy's growth at 8% annually. Inadequate port facilities, poor road infrastructure and frequent power cuts prevent Indian industries from operating efficiently and expanding sales. India needs to increase its spending on infrastructure projects to 8% of the country's GDP from 4.6% at present. Despite these obstacles, however, BMI's India Freight Transport Report Q4 2007 concludes that the country will reach average annual freight-traffic growth of 11.1% in the 2008-2012 period.

Strong economic and foreign-trade growth is underpinning the freight upturn. Demand in the road-freight sector is boosted by door-to-door logistics, the move to higher-value/lower-bulk shipments, the rising size of the vehicle fleet and the new impetus to improve and extend the network, using private-sector highway operators and build-operate-transfer (BOT) schemes. Rail will experience steady but less spectacular growth, given the predominance of the state-controlled Indian Railways; however, even here some promising signs of reform are beginning to emerge. All other transport modes should experience faster growth, with international air cargo turnover performing strongly as more private airlines join the market. Sea transport through India's major ports will also perform well. A major factor over the next few years will be the rising competitive pressures from cargo operators among India's immediate neighbours and main trading partners.

The dynamic pace of development and competitive wages are delivering a significant boost to the industry, largely offsetting the traditional problems of poor infrastructure and bureaucracy. To this must be added a favourable operating environment. BMI has given India a composite score of 51 (out of a possible maximum of 70 and a regional average of 44.8) in our freight sector business environment index, which places it at the top end of the regional ranking list. It scores very highly in the freight growth category, but performs less well in the regulatory environment, long-term economic risk and infrastructure growth categories.

For the 2008-2012 forecast period we expect the transport and communications sector to outpace the economy as a whole. It will achieve average annual growth of 8.4%, versus 8.1% for overall GDP. The total value of transport and communications GDP will rise to US$100.28bn in nominal terms by 2011, representing 7.6% of India's GDP.

Contents

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Chapter 1 - Executive Summary

Chapter 2 - SWOT Analysis

Indian Road Haulage SWOT

India Economic SWOT

Chapter 3 - Business Environment Overview

Business Environment Ranking

Economics – Long-Term Risk

Politics – Long-Term Risk

Freight Transport Growth

Transport Infrastructure Growth

Regulatory Environment

Competitive Environment

Transport Intensity Index

Political Risk Summary

Economic Risk Summary

Business Environment Risk Summary

Legal Code/Corruption

Red Tape

Chapter 4 - Industry Trends And Developments

Road

Rail

Air

Sea

Pipelines

Chapter 5 - Industry Forecast Scenario

Table: GDP And Population

Transport Outlook

Table: Freight Transport Indicators

Freight carried (domestic and international):

Chapter 6 - Country Snapshot: India Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education And Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption And Stratification

Table: Wages per year

Chapter 7 - Trade Environment

Table: Value of Imports by Category (US$mn)

Table: Value of Exports by Category (US$mn)

Table: Top Export Destinations, US$mn

Table: Export Trade, % y-o-y

Top Import Sources

Table: Import Trade, % y-o-y

Trade Regime

Overview

Trade Agreements

Tariffs

Chapter 8 - Market Overview

Competitive Landscape: Multimodal

Road

Infrastructure

Competitive Landscape: Road

Rail

Infrastructure

Competitive Landscape: Rail

Company Profiles

Air

Infrastructure

Competitive Landscape: Aviation

Company Profiles

Water

Infrastructure

Competitive Landscape: Maritime

Company Profiles

Pipelines

Infrastructure

Competitive Landscape: Pipelines

Chapter 9 - BMI Forecast Modelling

How We Generate Our Industry Forecasts

Transport Industry

Sources

Chapter 10 - Appendix: Regional Demographic Data

Table- Manufacturing Wages (ave per annum), US$

Table - Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Competitive Landscape for Asia Freight Transport Reports: Sample of Companies Ranked

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Analysis of latest projects across the freight transport sector – road, rail, air, sea, logistics – including market overview which provides an outline of the key elements driving development. SWOT analysis of the state’s business environment, transport sector, politics and economics, which carefully evaluates the short- and medium-term issues facing the industry.

Network of Asian Freight Transport Sources

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BMI's Asian Freight Transport Reports are based on an extensive network of multilateral organisations, government departments, freight transport industry associations, chambers of commerce and company reports. Information sources include: