In recent years, the Indian government has embarked on a series of ambitious initiatives aimed at revolutionizing the warehousing and manufacturing sectors within the country. These initiatives play a pivotal role in propelling economic growth, reducing logistic costs, and enhancing operational efficiency. In this article, we delve into a couple of the key government initiatives and their impact on the warehousing sector.
National Logistics Policy
In the contemporary global business and economic landscape, the significance of a cost-effective and robust logistics and warehousing sector cannot be overstated. The NLP’s primary objective is to achieve a substantial reduction in logistics costs, aiming for a global average of 8% by 2030. This ambitious target is poised to yield positive and direct outcomes for the sector in the foreseeable future.
The Indian warehousing market, which had a valuation of Rs 1,206.03 billion in 2021, is anticipated to witness remarkable growth, projecting to reach Rs 2,872.10 billion by 2027, marking a substantial CAGR of 15.64% during the ongoing period from 2022 to 2027. Bolstered by favorable government policies such as ‘Make in India’ and ‘Digital India,’ encompassing all sectors, the warehousing industry is gearing up to adopt eco-friendly practices to align with international benchmarks
Source: ET
New Warehousing Policy: Paving the Path Forward
The Indian government has introduced a new warehousing policy to establish exclusive warehousing zones through public-private partnerships (PPPs). Spearheaded by the National Highways Authority of India (NHAI), this policy aims to enhance logistics across the country, reducing transportation costs. These modern warehouses will accommodate cold-storage chains for wet and dry cargo, strategically located outside city centers to alleviate pollution and congestion.
Leveraging existing land along highways and expressways, private players will be invited through tenders to develop these zones in a PPP framework, either on a revenue-sharing basis or a fixed fee. This move aligns with government efforts to reform the transport sector and lower India’s logistics costs, fostering economic growth. As part of this strategy, NHAI is also establishing warehousing zones and multi-modal logistics parks (MMLPs), benefiting industries like FMCG, steel, and cement by providing inventory proximity to key hubs.
Investment in Logistics & Infrastructure Development: Building Strong Foundations
As per IBEF (India Brand Equity Foundation), in the fiscal year FY23, the government has allocated an impressive sum of US$ 91.38 billion (equivalent to Rs. 7.5 lakh crore) for investment in infrastructure, the development of logistics networks, and the enhancement of multi-modal connectivity. This infusion of funds is poised to facilitate cutting-edge logistics solutions and attract both domestic and international investments.
The unwavering commitment to strengthening infrastructure is evident through its focus on dedicated freight corridors and the expansion of road and rail networks. This emphasis on connectivity not only reduces travel times but also enhances the efficiency of goods movement.
Pradhan Mantri Gati Shakti
The Gati Shakti initiative is a groundbreaking effort that brings together the infrastructural initiatives of 16 central ministries and departments under a unified central portal. This grid not only facilitates smoother information flow but also expedites project clearance, contributing to the successful implementation of key infrastructure projects like Bharatmala, Sagarmala, and UDAAN. With its focus on seamless multimodal connectivity, optimal resource utilization, and resolution of planning issues, the Gati Shakti master plan envisions world-class infrastructure and logistics synergy.
The Gati Shakti plan sets diverse targets for India’s infrastructure development, including expanding the national highway network to reach 2 lakh km, establishing approximately 200 new aviation facilities, increasing railway cargo capacity to about 1,600 tonnes by FY25, expanding the electricity transmission network to 454,200 circuit km, and achieving 225 GW of renewable capacity by FY25, along with completing approximately 17,000 km of gas pipelines.
Source: Times Property
The Indian government’s relentless pursuit of transformative initiatives is poised to reshape the nation’s warehousing and manufacturing sectors. As these initiatives converge, India’s logistical landscape is destined for greater efficiency, environmental sustainability, and economic growth, positioning the nation as a global logistics powerhouse.