Logistics & Transport Business Setup in India
India's logistics sector, valued at over $200 billion, is the backbone of the economy, connecting manufacturers with markets across the vast geography of the country. The government's PM Gati Shakti National Master Plan aims to reduce logistics costs from 13-14% of GDP to 8-10%, creating massive opportunities for logistics entrepreneurs.
This comprehensive guide covers the registration process for logistics companies, transport businesses, warehousing operations, and supply chain service providers in India.
Industry Overview and Market Potential
Market Statistics
- • Logistics market: $200+ billion
- • Growth rate: 10-12% CAGR
- • Employment: 22+ million workers
- • Logistics cost: 13-14% of GDP
- • Warehousing: $4+ billion market
Growth Drivers
- • E-commerce boom
- • Manufacturing growth
- • Infrastructure development
- • GST implementation
- • Cold chain demand
Step-by-Step Registration Process
Company Registration
Register as Private Limited Company for larger operations or LLP for smaller transport businesses. Pvt Ltd recommended for fleet operators and warehousing companies seeking funding.
GST Registration as GTA
Register under Goods Transport Agency (GTA) category. GTAs can choose 5% GST without ITC or 12% GST with ITC. Registration mandatory in each state of operation.
Vehicle Registration
Register commercial vehicles with RTO. Obtain fitness certificates for all vehicles. Ensure vehicles meet emission norms (BS-VI). Get commercial vehicle insurance.
National Permit
Apply for All India Permit (National Permit) for interstate operations. Valid for 5 years. Requires payment of composite fees to all states. Vehicle age must be under 12 years.
Warehouse License (if applicable)
Obtain warehouse registration under Warehousing (Development and Regulation) Act, 2007 if operating warehousing facilities. Required for accreditation and government contracts.
GST for Goods Transport Agency (GTA)
Goods Transport Agencies have special GST provisions allowing them to choose their tax treatment based on their business model and input tax credit requirements.
Option 1: 5% GST (No ITC)
- • Pay 5% GST (2.5% CGST + 2.5% SGST)
- • Cannot claim input tax credit
- • Suitable for businesses with low capex
- • Simpler compliance
Option 2: 12% GST (With ITC)
- • Pay 12% GST (6% CGST + 6% SGST)
- • Can claim input tax credit
- • Suitable for asset-heavy businesses
- • Better for fleet owners with high fuel costs
Vehicle and Permit Requirements
| Requirement | Details | Issuing Authority |
|---|---|---|
| Commercial Vehicle Registration | Goods carriage category | Regional Transport Office (RTO) |
| Fitness Certificate | Annual renewal required | RTO/Motor Vehicle Inspector |
| National Permit | All India operations (5 years) | RTO (National Permit Section) |
| Driver License | Heavy vehicle endorsement | RTO |
| Vehicle Insurance | Commercial vehicle policy | Insurance companies |
| PUC Certificate | Pollution under control | Authorized centers |
E-way Bill Compliance
E-way bill is mandatory for inter-state movement of goods worth ₹50,000 or more. For intra-state, threshold varies from ₹50,000 to ₹1,00,000 depending on state.
E-way Bill Requirements
- • Generated on GST portal
- • Valid for 1-15 days based on distance
- • Carried by transporter
- • QR code for verification
Transporter Responsibilities
- • Verify e-way bill before transport
- • Update vehicle number if changed
- • Maintain records for 5 years
- • Penalty for non-compliance: ₹10,000 or tax
Warehouse Registration
Warehouses can be registered under the Warehousing (Development and Regulation) Act, 2007, enabling them to issue negotiable warehouse receipts and access various government schemes.
Registration Benefits
- • Issue negotiable warehouse receipts
- • Access to WDRA accreditation
- • Bank pledge financing support
- • Government contract eligibility
Registration Process
- • Application to WDRA
- • Infrastructure inspection
- • Net worth verification
- • Security deposit
Government Initiatives
PM Gati Shakti
National Master Plan for multimodal connectivity. Integrates infrastructure planning across ministries for seamless logistics movement.
Bharatmala
Road development program improving highway connectivity. Reduces transit time and logistics costs for road transport.
Sagarmala
Port-led development program enhancing port connectivity and coastal shipping for maritime logistics.
Fleet Management Best Practices
Technology Adoption
- • GPS tracking for all vehicles
- • Fleet management software
- • IoT sensors for cargo monitoring
- • Digital proof of delivery
Compliance Management
- • Regular fitness certificate renewals
- • Driver training and verification
- • Insurance policy management
- • Permit renewal tracking
Key Takeaways
Essential Registrations
- ✓ Company registration (Pvt Ltd/LLP)
- ✓ GST registration as GTA
- ✓ Commercial vehicle registration
- ✓ National Permit for interstate transport
Growth Strategies
- ✓ Leverage government infrastructure projects
- ✓ Adopt technology for fleet tracking
- ✓ Explore warehousing opportunities
- ✓ E-way bill compliance automation