Warehousing in India - Growth factors driving transformation

Traditionally, one of the most ignored sectors in logistics, warehouses today have developed into sophisticated stockrooms with advanced, real-time tracking mechanisms, and other state-of-the-art facilities, which have been instrumental in shaping the modern economy.

Warehousing is an important component of the Logistic value chain and plays a significant role in quality storage of goods and merchandise during the varied stages of transportation. Until a few decades ago, warehouses were mere ‘holding’ areas, housed in dingy or dilapidated buildings with poor light or ventilation facilities. Since then, warehousing as a sector in India has evolved manifold, with the low-grade godowns being replaced by pre-engineered structures that are insulated, ventilated and climate-proof, with round the clock surveillance, and standard safety procedures.

The Indian warehousing industry, estimated to be worth INR 561 Billion (excluding inventory carrying costs, which amount to another ~INR 4,340 billion) in 2017, is estimated to grow at 9.5% CAGR to reach INR 968 Billion by 2024. Riding high on the structured reforms wave, including the recent infrastructure status granted to logistics, and the implementation of GST, the Indian warehousing and logistics sector is estimated to attract nearly 10 Billion USD investments over the next 4-5 years. With addition of around 200 million sq ft warehousing space across India, total supply is expected to nearly double by 2022, estimated JLL India. It accounts for ~5% of the Indian logistics market (excluding inventory carrying costs, which amount to another ~30%).