India’s logistics industry is forecast to become an over Rs 5.55 lakh crore ($120.42 billion) market by 2014, driven by growth in the manufacturing sector, a study by global consultancy Frost & Sullivan said.

The growth of India’s manufacturing sector over the last few years has created a wealth of opportunities for the logistics sector, according to a report by Frost & Sullivan. The research company has published its latest report – titled ‘Strategic Analysis of Indian Logistics Market’ – which suggests that the logistics market earned a total of US$75.19 billion in revenues last year, representing about 6.2 percent of the country’s GDP.

While airlines have typically focused on passenger revenues, a surge in demand has led them to pay greater attention to the cargo side of the business.

Although the Indian logistics industry is growing at about 10 per cent, its investment on information technology is not keeping pace. “The industry as a whole is at a relatively early stage of technology adoption. This is evident from the fact that capital expenditure is completely uncorrelated with (technology) adoption.

South Korea’s POSCO, the world’s No.4 steelmaker, on Monday forecast global steel demand would increase by about 10 percent this year, while local media said the company would double its spending on facilities and aquisitions.

JK Business School last week launched the Centre of Excellence in Logistics & Supply Chain Management (CELSCM) at its campus in Bhondsi, Gurgaon. CELSCM is envisaged as a research and resource centre for raising the level of knowledge in the field of logistics & supply chain management.

Outsourcing of 3rd Party Logistics business (3PL) in India is all set to acquire a size of US$ 90 million by 2012 as the concept introduced in US and Europe is fast catching up the pace to increase the efficiency of domestic corporates through efficient logistic functions, according to the ASSOCHAM.

The increasing focus on core business activities by manufacturing sector will result in 20% CAGR growth in Indian 3PL industry during 2009-2012.

Industry players and analysts say logistics costs in India are among the world’s highest — accounting for 13% of GDP, according to a report by KPMG.

India’s logistics industry, valued at 3.6 trillion rupees, is poised to grow 11 percent annually on strong economic fundamentals but high spends are a concern, Crisil Research said on Wednesday.