The third-party logistics (3PL) business in India is likely to reach $90 million by 2012 from $58 million now, as the model is fast catching up among the country’s businessmen due to its cost advantage, an industry lobby report says.

“Currently 3PL outsourcing among Indian companies is estimated at $58 million as 55% of them are outsourcing services like supply chain management and warehousing,” the Associated Chambers of Commerce and Industry of India (Assocham) said in a paper.

According to the chamber, India’s logistics market size will reach $125 billion by 2010 from $105 billion now, growing at an average rate of between 16-17% in the next two years. Logistics will register exciting growth in the next two years as manufacturing, retail and real estate, which currently are under severe stress, will return to their buoyancy, the paper said. More companies are turning towards 3PL as it helps them bring down conventional logistics costs and handle more complicated tasks.