Vestian’s report shows that the warehousing & logistics sector in India received investments worth USD 1.96 Bn in 2024, accounting for 29% of total institutional investment in the real estate sector. The surge in demand for warehouses was driven by the rapid expansion of the quick commerce sector.
Leading to a record absorption of 44.9 million sq. ft. in 2024. The second half of 2024 saw 28.3 million sq. ft. of absorption, a 70% jump compared to H1 2024, the highest ever recorded in a single calendar year. The government’s focus on mega infrastructure projects is expected to further propel growth in the W&L sector.
However, limited availability of skilled workforce, regulatory challenges, and land acquisition costs may pose challenges. In 2024, India’s warehousing and logistics sector attracted investments totaling $1.96 billion, according to a report by Vestian. This substantial influx of capital underscores the sector’s critical role in supporting the nation’s economic growth and the increasing demand for efficient supply chain solutions.
Key Drivers of Investment
Several factors have contributed to this surge in investment:
- Infrastructure Development: The Indian government’s continued focus on enhancing infrastructure has been pivotal. The Union Budget for 2024-25 allocated ₹11.11 lakh crore to infrastructure projects, aiming to stimulate economic growth and attract private investments. Additionally, ₹26,000 crore was earmarked to transportation networks.
- Emergence of Logistics Parks: As part of the National Industrial Corridor Development programme, 12 new industrial parks are set to be developed. These parks will feature comprehensive supply chain infrastructure, including ‘plug-and-play’ facilities, across 100 cities. This initiative aligns with the government’s vision of creating ‘smart cities’ equipped with advanced technology, further bolstering the logistics framework.
- Technological Advancements: The integration of technology into logistics operations has enhanced efficiency and transparency. Companies are increasingly adopting advanced systems for real-time tracking, inventory management, and automation, making the sector more attractive to investors.
- E-commerce Expansion: The rapid growth of e-commerce in India has heightened the need for robust warehousing and logistics solutions. Consumers’ increasing preference for online shopping has led to a surge in demand for efficient supply chain networks.
Notable Events and Initiatives
The sector’s vibrancy is also reflected in various events and initiatives:
- India Warehousing Show 2024: Held from July 11-13, 2024, at the India International Convention and Expo Centre in New Delhi, this event showcased a comprehensive range of logistics and supply chain solutions. It provided a platform for industry professionals to network, explore new markets, and discuss innovations.
- 2nd National Summit on Warehousing & Supply Chain: Organized by the Federation of Indian Chambers of Commerce & Industry (FICCI) on October 16, 2024, in New Delhi, the summit focused on driving efficiency through innovative solutions. It brought together industry leaders to discuss sustainable practices and the future of logistics in India.
Impact on the Economy
- Job Creation: The development of new logistics parks and the expansion of existing facilities are expected to generate employment opportunities across various skill levels. Investments in infrastructure and logistics hubs contribute to the economic development of regions, improving connectivity and access to markets.
- Global Competitiveness: Enhanced logistics capabilities position India as a more attractive destination for global businesses, potentially increasing foreign direct investment. Navigating complex regulatory frameworks can be a deterrent for potential investors. There is a need for a workforce adept in modern logistics technologies and practices.
Looking ahead, the sector is poised for continued growth. The government’s commitment to infrastructure development, coupled with private sector innovation, is expected to further strengthen India’s position in the global logistics landscape. As e-commerce and manufacturing sectors.
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