How to Start a Transportation Business in India?

The last several years of economic growth in India have created a massive demand for logistics services. The logistics sector employs more than 50 million people in India. A strong logistics partner can help any organisation improve its operational efficiency by reducing costs and delivery times. Ultimately, this translates to market share and financial success for the company.

This article will cover how to establish a transport business in India and the procedures needed to launch a business of this nature there.

What is Transport Business?

India’s transportation industry, the lifeblood of the nation’s goods-based sectors, is a critical pillar supporting the country’s economic framework. This vast industry bifurcates into two primary segments: goods and passenger transportation.

Both industries are highly prominent in India and offer attractive opportunities for budding businessmen and entrepreneurs. Let's examine the transport business market in India and discuss how you can start your own transport business.

How is the Market in India?

As per the Economic Times, the Indian logistics market will grow 8.8% annually to $484.43 billion by 2029. The surge is supported by robust economic expansion and cutting-edge technology. Further, the Indian bus industry is expected to be valued at 1,04,000 crores in 2026, growing at a compounded annual growth rate of 6.64%.

• By 2030, the Indian government aims to increase the sale of EV cars by at least 30%
• The transport industry contributes 6.5% of India’s GDP
• Opportunities in the transport industry include logistics, ride-sharing, drone delivery, etc.

Types of Transport Businesses

The following are different types of transport businesses that are prominent in India:

1. Taxi Services: This business model provides ride-hailing services for intra-city, inter-city, and inter-state travel. You can also consider renting out their vehicles for this purpose.
2. Logistics Services: Logistics service involves transporting goods from one location to another and its management. Renting out trucks to companies for internal transportation can be highly profitable.
3. E-commerce Delivery Services: Starting an e-commerce delivery company can be very beneficial in this era of e-commerce. In the e-commerce delivery service business, you can facilitate the transfer of items ordered online from a retailer to the customer’s designated delivery location.
4. Bus Transport: Engaging in passenger transportation business or renting buses for passenger transportation.
5. Special Transportation: Special transportation services consist of distinct and specialised modes of transport that are specially developed to meet specific requirements of various industries or types of cargo.
6. Livestock Transportation: Livestock transportation is a specific niche that requires specialised vehicles. Because livestock are more vulnerable than goods, they need vehicles accordingly.

What Do You Need to Start a Transport Business?

To start your own transport business, you need to have the following things:

1)Why Should You Start a Transport Business?

The transport industry is the backbone of most goods-based industries, and therefore, it presents an attractive opportunity to start a flourishing business. Further, this industry has a lot of scope for transformation and innovation.

2)Steps to Launching Your Transport Company

Following are the steps to launch a transport company in India

• Decide on your specific transport niche like passenger transportation, goods transportation or logistics
• Finalise your business model, i.e., how you are going to operate
• Complete all formalities relating to company incorporation, permits, and registration
• Move forward with arranging assets, i.e., buying or renting the vehicles, etc.
• Enter into strategic tie-ups
• Prepare budgeting and financial expectations
• Start operating your company

3)Things Required to Start Your Transport Company

You will need the following to start your transport company:

1. Vehicles: This is the essence of the transport industry. If you are in the goods transport industry, you require trucks, pick-up trucks, etc. On the other hand, passenger transportation would need cars, minivans, or buses. You can rent or purchase these vehicles, whether new or second-hand. In the case of a second-hand vehicle, you should verify the owner details from the RC and, consequently, get the vehicle registered in your name after purchase.
2. Drivers: You need to arrange for the drivers to drive the vehicles. Depending on your needs, you can hire them full-time or even on a contractual basis. However, you should ensure they have proper driving skills and can drive for long hours.
3. Insurance: Commercial vehicle insurance policy is a must for all vehicles. It helps you stay legally compliant and minimises your losses in case of an accident. Comprehensive insurance coverage can reduce many of your business risks and potential losses in case of mishaps.
4. Trackers: One concern in the transport business is vehicle loss or theft. You must ensure that all your vehicles are GPS-enabled and actively tracked, especially in case of theft. GPS tracking provides live location updates of your vehicles, which always ensures that you have peace of mind knowing where your vehicles are.

Things to Keep in Mind When Running Transport Business in India

Following are some of the essential things that you should keep in mind when running the transport business in India:

1. Keep Documents Handy: You should keep all vehicle-related documents in the vehicle. You can also store all the documents electronically using the DigiLocker mobile app for convenience. 
2. Have Active Vehicle Insurance: You should ensure that your vehicle insurance, especially for trucks and buses, is always active and provides comprehensive coverage. Accidents can happen anytime, anywhere, and it is important to have a safety net.
3. Follow Traffic Rules: You should train your drivers to follow all the traffic rules to avoid getting hefty challans and any potential legal consequences.
4. Have Transport Permit: A transport permit is essential to run commercial and transport vehicles on public roads. Further, you will require a national permit if you are engaged in interstate transport business.
5. Driver's Valid Driving Licence: You should only hire drivers with valid driving licences and proper driving skills. This can save much hassle due to potential accidents in the future.
6. Pollution Under Control Certificate: All your transport vehicles should have a Pollution Certificate (PUC) to ensure their emissions are within the permissible range.

In a Nutshell

The transport industry is booming in India, and demand will only rise. Now is the right time to start your dream transport business. You just need to handle the above essentials to kick-start your business. Being on the roads at all times can be risky. Therefore, adequate and comprehensive insurance coverage can help you minimise your business risk and financially protect your drivers.

Insurance involves vehicle insurance and the insurance of the goods you are transporting. With time, you can own a fleet of vehicles and earn handsomely!