Mumbai, Feb 10 (IANS): India's logistics sector is advancing rapidly, propelled by increasing investments, digital transformation and robust policy initiatives, and 2025 may exceed the 25 per cent annual growth seen in the industrial and logistics space absorption last year, according to a new report on Monday.

The warehousing and logistics sector contributes 13-14 per cent to India’s GDP and is expanding to keep pace with the country's rapid economic growth,

“In H1 (first half) 2024, the sector captured 66 per cent of the private equity investments across all asset classes,” said Ankita Sahu from ANAROCK Capital.

The demand from third-party logistics (3P) players, e-commerce, retail businesses and manufacturing companies continues to drive logistics space demand.

Chennai, Mumbai, Pune, and NCR will continue to be the key logistics hubs in 2025, with logistics park developers actively exploring opportunities for land acquisition to develop warehouses and fulfilment centres in these key markets.

Absorption in the industrial and logistics space witnessed an almost 25 per cent year-on-year growth in 2024, the report mentioned.

There is a significant push from the government for this sector's growth, which is evidenced by various policies and initiatives announced in the last couple of years.

“Government initiatives like PM Gati Shakti and the National Logistics Policy will help significantly in overcoming these challenges,” said Sahu.

In the recent Union Budget 2025, the infrastructure sector remained a top priority, with further support to public-private partnerships and the private sector in project planning, by making data and maps from the PM Gati Shakti portal accessible to them.

The Budget also outlined upgradation of infrastructure and warehousing for air cargo handling.

Many multi-modal logistics park projects are currently being planned and developed under public-private partnerships. This will eventually help reduce transportation costs.

With the industry's focus on technological advancements, 2025 will see the beginning of adoption of 'digital twins' - a warehouse's virtual model that simulates, in real-time, its physical processes and systems.

This will help the logistics industry optimise warehouse operations and inventory and supply chain management, to potentially pre-empt inefficiencies and improve operations.

With growing organised retail chains, the rapid rise of quick service restaurants (QSRs), overall increased food consumption, last-mile deliveries, the farm-to-fork supply chain concept, and pharmaceutical advancements, India's need for cold storage logistics will see rapid growth in 2025, said the report.