Bringing about a significant change to India’s Warehousing Capacities: A thought already put to action | The Financial Express

Bringing about a significant change to India’s Warehousing Capacities: A thought already put to action

The DPIIT’s LEADS Surveys have often come to report the lack of warehousing spaces, delays in planning and commissioning of projects and a scarce availability of duly trained professionals.

Bringing about a significant change to India’s Warehousing Capacities: A thought already put to action
Amidst the rising market opportunities, warehousing industries in India are currently centred only on Tier I cities such as Delhi, Mumbai, Kolkata, with very minimum ventures into Tier II or III.

By Manu Bhalla

As India continues to rise the rank of economic indices, there has risen an immediate need to reshape how the logistics sector of the country has been operating. Amidst the rising market opportunities, warehousing industries in India are currently centred only on Tier I cities such as Delhi, Mumbai, Kolkata, with very minimum ventures into Tier II or III. Some of the issues that can be traced from the ongoing hesitancy into a holistic development of the warehousing industry is the sparse availability of quality infrastructure in the country. The DPIIT’s LEADS Surveys have often come to report the lack of warehousing spaces, delays in planning and commissioning of projects and a scarce availability of duly trained professionals. The conditions could be well seen when India’s per capita warehousing stock of 0.02 sqm is compared to leading economic giants such as the UK with 1.09 sqm and US with 4.4 sqm. Secondly, for a country now majorly having private sector players dominating the economy, the major share of warehousing capacities still lie with public sector units. Experts have often come to voice their opinion over their lack in optimal size, adequate designs, ventilation facilities, a proper inventory management and storage as they continue to be built following traditional norms of ‘immediate adjustments.’ Where many have come to voice their opinion in promoting PPPs to facilitate better investments, critical infrastructure gaps, limited and limited sources of capital investments have all inhibited any possibilities to bring about a change in the industry.

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However, one cannot deny the abundant economic opportunities that the warehousing sector will be bringing in. The sector is expected to grow at a Compound Annual Growth Rate (CAGR) of nearly 15% till 2025 to reach a value of at least Rs. 2 trillion by the same year. Subsequently, warehousing transactions would grow at a CAGR of 19% to 7.08 million sqm by 2026 from a 2.95 million sqm in 2021. Therefore, one of the primary efforts of the government was to bring about a significant approach towards facilitating smoother and faster planning of logistics infrastructure across all infrastructure and user Ministries/Departments. The PM GatiShakti is one such approach that looks to synchronise the planning and implementation stages by institutionalising inter-ministerial coordination and digitalising all planning stages. Under this approach, the Government was quick to devise a National Master Plan with over 900+ GIS layers which would be able to display a series of infrastructure layers such as roads, ports, railway lines, soil conditions and all other data required to effectively facilitate a boost in logistic capacities. This has made it easier to set up Multimodal Logistics Parks that would connect urban transport to railways, warehouses and in some cases inland waterways to enable multi modal movement of Exim traffic in a cost effective manner. Such Multi Modal parks are now being planned at strategic locations across the country.

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However, for the government to create a more enabling environment for warehousing efficiency and presence across the country, it is working on reforms to existing policies and introduce more business friendly policies to facilitate and enable investment in World class Warehousing infrastructure which will dove tail into the “Make in India” objective alongside the “Aatmanirbhar Bharat” initiative. While the government has been underway to develop a National Logistics Policy, there has also been an effort to address the difficulties faced in quality and design of A Grade warehouses through an“e-Handbook on Warehousing Standards”. With the National Logistics Policy expected to create an enabling environment for FDIs and capital investments within the logistics sector, the e-Handbook on Warehousing Standards Is expected to set standards on developing A-Grade World Class warehouses across the country to help effectively utilise these assets and bring down logistics costs by improving efficiency and productivity through automation and economies of scale.

The author is the President of the Warehousing Association of India

Disclaimer: Views expressed are personal and do not reflect the official position or policy of Financial Express Online. Reproducing this content without permission is prohibited.

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