Global warehouse developers consider India as a perfect fit for the development of logistics parks; prime reason being the sudden increase in domestic consumption and cost-effective outsourcing. Over the last few years, automotive, retail, pharmaceutical, and agricultural industries have gained tremendous traction. Modern industrial spaces in Delhi and Mumbai are getting quickly filled as investors and developers are taking a keen interest in investing in this area.
Let’s see what opportunities will be there in future for Indian warehouse industry:
The Automobile Industry
The reason why the automobile industry is growing faster than any other industry is because foreign players are specifically showing interest in it. With the increase of importance in efficient logistics and just In Time (JIT) services, the evolution has never been so fast. We are also expecting a boom in the emergence of 4PL services that will enable the industry players to create a perfect blend of in-house and outsourced service components to manage supply chains. Government is also playing an important part in boosting this sector by establishing Special Economic Zones (SEZs).
For multinationals and private equities, Indian retail market has always been the most attractive destination. The reason behind it is increasing urbanization, disposable incomes, and favorable demographics. Most of the existing players are planning for large expansions and new players are also looking forward taking advantage of organized Indian retail market. There has been a rise in industrial investment in manufacturing and IT near Chennai and Bangalore as well. The demand for modern warehouse space in south India is also increasing and it is expected that the retail market is going to get a big boom in coming years, especially in Chennai and Bangalore. Global players are realizing the importance of rising demand for modern warehouses in India and they are looking for the partnership with domestic real-estate companies.
Not just urban areas but rural areas are also attracting global retailers. Although, rural areas do not have well-developed infrastructure but global retailers are keen on establishing their base over as they will be getting the opportunity to invest in cold storages and customized warehouses that are near to the farms.
The Pharmaceutical Industry
Interestingly, economic downturn did not affect the pharmaceutical industry in India or many countries to such an extent. In order to support the growth of the pharmaceutical industry, investors should make sure that logistics operation and integrated supply chain work in an organized fashion. Many pharmaceutical industries preferably outsource logistics from 3PLs due to lower operation costs and supply chain efficiency. Moreover, customers are also looking forward outsourcing their logistics operations from logistics service providers, which means more consolidation and integration of logistics is likely to happen in the future.
Pharmaceutical products are temperature sensitive and they require highly reliable and safe places for storage. The Indian pharmacy industry is eyeing for global goals. Hence, they need to maintain high-level cold-chain management practices to maintain the competitiveness in the market.
Last 2 years have been a little dicey for the Indian agriculture sector but thanks to the government, NGOs, and some private entities, things have been a bit smooth now. In order to develop this sector, the investors have to deal with several challenges such as supply chain inefficiencies, heavy losses on commodity and lack of proper storage. The supply chain activities in our country are handled by state-run CWC and FCI or some other unorganized sectors. The current scenario of this industry has pretty much changed with the entry of private and multinational retailers into the market.