INDIA WAREHOUSING MARKET
- E-commerce and manufacturing are the two biggest demand generators in the warehousing space with nearly 30% and 25% of share in total warehousing space.
- In manufacturing the growth has been generated by electronics, Auto and Auto components and food processing industries. In the e-commerce segment most of the share is occupied by Flipkart followed by Amazon.
- 3PL is the biggest driver in the MMR region, this can be observed by the FM Logistic India has entered into a contract with Welspun One Logistics Parks to lease 9 Lakh Sq. ft warehousing space at Bhiwandi.
- Automobile is the biggest contributor in warehousing space in Pune region, this can also be observed with Logistics solution company Om Logistics said it has invested Rs 125 crore in a new warehousing facility in Pune’s Chakan
- In industrial and retail warehousing, All Cargo Logistics is largest player in the market with most market share, TCI express is the company with highest asset turnover and Transport Corp. of India has strong profitability and EBITDA.
- In liquid warehousing, Aegis logistics is the largest public listed company in this field in terms of capacity IMC Ltd. has the highest capacity and these two firms have the most market share compared to all the other players.
In India warehouses become a segment of rapidly growing logistics industry. Today warehouses do not just provide confinement of goods but also serve various services such as: packaging, sorting, blending, and processing. The initiative had been taken by government as set up of FTWZs (Free trade warehouse zone) under the Warehousing Act 2007 to promote and growth of India Warehousing market.
Warehousing is becoming so important from an industry standpoint for the Indian economy that
- The government will soon seek cabinet approval for the merger of Central Railside Warehouse Company (CRWC) Limited with Central Warehousing Corporation (CWC), in line with its vision to reduce wasteful administrative costs by way of privatization or consolidation under holding companies of public sector enterprises.
- To facilitate the privatization of state-run Container Corporation (CONCOR), the government is planning to halve the lease rates payable by the company for industrial use of the railways’ surplus land to 3%. Also, the land lease period will be extended to 35 years from 5 years now, with a view to giving additional comfort to potential buyers.
Nearly 60% of the modern warehouses are in six cities namely Mumbai, NCR, Chennai, Pune, Bangalore, Ahmedabad, Kolkata and Hyderabad are the major warehousing markets.
Current land reserved for India warehousing purpose – 21,163 acre.
MULTI MODAL LOGISTICS PARKS
MMLPs are expected to serve five key functions: freight aggregation and distribution, multimodal freight transport, integrated storage and warehousing, IT support, and value-added services.
Two MMLPs are planned in the vicinity of Bengaluru (Karnataka) and Guwahati (Assam)
- Bengaluru is ideally located for an MMLP in south India, with good connections via rail and road networks, and proximity to 17 million potential consumers in Chennai. In this regard, the state government identified Dabaspete, a tiny town located in Bangalore Rural District, as the site for MMLP.
- MMLP in Jogighopa, Assam (about 150 km from Guwahati), which incorporates rail, road, and inland waterway connectivity. The proposed site is located on the Indo-Bangladesh road route along National Waterway 2, making it suitable for multimodal access.
FREE TRADE WAREHOUSING ZONES
FTWZs are Deemed Foreign Territories / Ports / Warehouse for Storage and Other value-added activities under the Customs Law. FTWZ units can hold inventory on behalf of Foreign Suppliers/ Domestic Buyers.
FTWZ law allows multiple transfers of ownership transactions without removal of the goods out of FTWZ, thus ensuring the trading chain to be as close as possible and as may be required, ensuring that there is no cascade of indirect taxes / compliance and avoids increase in transaction cost.
|Benefits for Imports||Benefits for Exports||Benefits to re-exports|
|1. Duty deferment benefits (freeing up working capital & increasing sales) |
2. Quality control capability prior to duty-payment
3. Exemption of GST on purchases and services (including transportation)
4. Availability of Temperature controlled area for medicines & other human consumption Products
|1. Products from India entering the FTWZ are treated as deemed export providing immediate benefits to suppliers |
2. Local Tax Exemption (i.e.Zero Rated IGST) on value added services carried inside the Zone
3. Increased efficiency through lowered reverse logistics through quality control before dispatch from India
|1. Service tax exemption on all activities conducted inside the FTWZ including rental & labor |
2. Exemption from custom and stamp duty
3. Income tax rebate on profit earned through export transaction
INDIA WAREHOUSING MARKET SEGMENTATION
The major segments represent in warehousing industry:
- Cold Storage
- Government Storage
In East and North India
- The Raipur-Vishakhapatnam Expressway would connect the Bhubaneswar this would improve the warehousing in this region.
- Eastern Dedicated Freight corridor would help the Sonnagar-Dankuni warehousing area in Kolkata as it is also connected to with the industrial area and Rail facility
- Kolkata has a strong demand potential for warehousing space, which would reach to 30 Million Sq. ft by 2023, it has observed a growth rate of 27%.
Out of all major segments, Agriculture warehousing has witnessed the highest growth rate of 17.87% of total revenue since 2019. The agricultural warehousing market valued at INR 145.82 billion and is expected to reach INR 365.75 billion in coming years.
Today India has total agricultural warehousing capacity of 91 million metric tonnes and majority own by state agencies. The need of storage of food and vegetables in agricultural warehousing is constantly growing.
Currently, India’s total warehousing capacity is estimated to be 160 Mn tonnes [Approximately 30% of this capacity managed by private sector] and rest managed by public sector [CWC (Central warehousing corporation), SWC (state warehousing corporation), FCI (food corporation of India), state agencies and co-operative sector].
In recent times, the rapid growth in the e-commerce industry is fueling the demand as well as the development of the logistics and warehousing sector of the country. In tier-1 and tier-2 cities e-commerce retailers has aggressively looking forward to opening up warehouses as well as collaborating with well-known logistics service providers across the country to be able to maintain a minimal delivery cost.
In 2018, the annual transaction of warehouses space in Kolkata reached 4.7 mn square feet from 1.6 mn square feet in 2017, the massive growth rate of 191% in total leasing.
INDIA WAREHOUSING MARKET DYNAMICS
The total warehousing space in NCR region is close to 110 Million Sq. Ft and an additional 9 Million Sq. Ft is expected to be added in the next financial year
The Delhi Development Authority has approved the FAR (floor area ratio) in warehousing from 80% to 100% and ground coverage from 30% to 40% to give a boost to warehousing demand in the capital region.
Indian e-commerce sector is expected to drive the demand for organized player in pharmaceutical and chemical industry, 3PLs, auto and auto ancillaries, FMCG, retail in the warehousing market of India.
The existing trend is be on cashing of the economy, there’s has been an increase in automobile industry sharped seen in the country. International trade is keep on increasing and strengthening the growth of India warehousing market.
Technological advancement has take place such as 3D Printing, AI, IoT, among others in the India warehousing market is further expected to create lucrative opportunities over the next few years.
The warehousing sector has captured interest of multiple large institutional investors, with inflow of 3.7 billion USD since 2017. In H1 of 2020 the sector accumulated a considerable 17% total private equity real estate investment.
This sector’s share of total private equity real estate investment in India is keep on increasing [YOY]. During 2019-2020, the industrial and warehousing segment collected the third highest share of private equity investments after office and retail.
To better comprehend the expanding demand for infill warehouse space in urban centres, as well as the predicted record-high levels of new warehouse building. However, land limits and hefty expenses could be viewed as a stumbling block.
This leads us to the conclusion that, in the coming years, a rise in adaptive reuse for industrial tenants is envisaged in retail buildings. The truth is that the United States has far too much retail space. Adaptive reuse enables developers to repurpose a structure that no longer serves the community for a higher and better purpose.
If the warehousing business hopes to increase net absorption totals in the near future, various considerations must be taken into account, ranging from ceiling heights to mezzanine floors. Automation is like a steam train that runs alongside warehouses.
More automated functions are possible with higher ceiling heights. Location also has a significant impact in this. Companies find that having warehouses outside of city limits, where they may have to pay a toll levy, is more cost-effective than sitting in traffic in the city centre.
Inventory management is particularly important as occupiers attempt to minimize supply chain disruptions by diverting supply sources away from Asia. Then there’s the rising demand for technology and long-term sustainability. To do this, the industry will need to invest heavily in machinery, technology, and artificial intelligence (AI).
In the coming years, industrial demand from both occupiers and investors will continue strong. It is a viable market for e-commerce enterprises, wholesalers, occupiers, and national investors alike because to its diverse business climate. Aside from the east-west corridor, the underutilized north-south corridor and the farthest west corridor could become hotspots for new warehouse building in the near future.
INDIA WAREHOUSING MARKET RECENT ACQUISITION
An deal has been reached by Singapore-based Ascendas India Trust and Arshiya Group to purchase a 3.30 lakh square foot warehouse in the Arshiya Free Trade Warehousing Zone in Panvel, Navi Mumbai, for Rs 215 crore. Ascendas will buy out Anomalous Infra, the company that owns this recently built working warehouse, and all of its issued share capital.
The executed forward purchase agreement includes the acquisition. From Arshiya Group, Ascendas India Trust purchased six operational warehouses totaling a leasable area.
The seventh warehouse will likewise be leased and run for a term of six years by a subsidiary of the Arshiya Group, just like these other six warehouses. It is anticipated that the purchase of this facility will soon be complete.
Ascendas India Trust is now able to significantly increase its presence in the logistics industry thanks to the acquisition. We are witnessing an increase in demand for the FTWZ logistics category due to the distinctive advantages it provides, and this acquisition puts us in a solid position to take advantage of this expansion.
The first Indian property trust in Asia, Ascendas India Trust, was listed on the Singapore Exchange Securities Trading. Its main goal is to acquire income-producing real estate in India that is mostly used as office space.
Additionally, it may purchase unfinished developments or develop land largely for commercial use with the intention of owning the assets after they are finished.
INDIA WAREHOUSING MARKET SIZE AND FORECAST
The India warehousing market size is estimated at XX Crores or $XXM USD in 2020 growing at –% CAGR till 2025.
INDIA WAREHOUSING MARKET COMPETITIVE LANDSCAPE
DHL India has captured a decent market share but has not been able to become a top player in India,Has a strong market presence in parcels and packages market. Mahindra Logistics Limited (MLL) has a strong presence in Indian 3PL market, it has strong presence in retail and industrial warehousing market
Bengaluru-based developer company Embassy Group, which has invested 100 million dollar and has committed to another 250 million dollar. This firm has leased out 3 million sq. ft and is constructing about 7 million more.
IndoSpace the India’s largest developer of industrial and warehousing parks, with 35 warehousing parks and 15 million sq. ft. In the current year, IndoSpace plans to build an additional 5 million sq. ft, backed by PE firm Everstone Group has invested over 3 billion dollar thus far.
- Hindrani Group
- Indospace AS Industrial park pvt.ltd
- Grofers India pvt.ltd
- Embassy Group
- Container Corporation of India Ltd.
- Gati Ltd.
- Mahindra Logistics Ltd.
- Transport Corporation of India Ltd.
- Central Warehousing Corporation
- DHL Express (India) Pvt. Ltd.
- Jayem Warehousing Pvt. Ltd.
- JICS Logistics Ltd.
- Shalimar Warehousing Corporation
- Spear Logistics Pvt. Ltd.
THIS REPORT WILL ANSWER THE FOLLOWING QUESTION
- Overview of India Warehousing market.
- COVID impact on India warehousing market.
- Growth strategy of warehousing market and opportunity in warehousing market.
- Market Size and Forecast of warehousing market.
- The investment prospect of Indian warehousing market.
- Impact of GST on warehousing market.
- Important distributors of warehousing market India
- The competition over coming growing strategies of Indian warehousing market.