The increasing entry of multinational IT hardware companies has led to a substantial growth in the Third Party Logistics (3PL) market in India's IT hardware sector.

According to a new analysis from Frost & Sullivan, Strategic Analysis of 3PL Markets in the Indian IT Hardware Sector, revenues in this market totaled $105.9 million in 2005, and is likely to reach $381.9 million in 2012.

Deepak Mohan, research associate, Frost & Sullivan believes, "The growth in the 3PL market in the Indian IT hardware sector is being driven by the increasing adoption of the 3PL concept by leading hardware companies. As these hardware companies grow and expand into new markets, 3PLs could witness a very healthy growth."

The implementation of value added tax (VAT) and abolition of sales tax is also expected to contribute to the growth of 3PLs.

"This apart, rising fuel costs and inadequate infrastructure are critical restraints for the growth of the 3PL sector," adds Mohan. "Overhead costs of 3PL operators are also comparatively high, resulting in higher service prices, which serve as a significant deterrent."