Exploring How Government Initiatives are Shaping India’s Warehousing Outlook Positively

India is one of the world’s fastest-growing economies. With homegrown businesses and start-ups gaining a stronghold in the domestic and international markets, world-class warehouses and manufacturing have become even more crucial than they used to be. A world-class warehouse space features cutting-edge technology and advanced safety measures, providing a non-hazardous environment where business owners can securely store their inventory.

Although world-class warehousing is impeccably designed to make business operations seamless, its success depends on macroeconomic factors like government policies, budget allocations and national infrastructure. Recently, the Indian Government has taken the initiative to make domestic warehousing more streamlined for logistics companies, supply chain owners, efficient warehouse management systems, integrated logistics, and more. Here is a brief rundown on all the ways the Indian warehousing sector is a beneficiary of government-led programmes and policies for the best manufacturing in India and warehousing in India.

National Logistics Policy

Running a business involves overseeing various facets, including logistics. The cost of logistics can put a real dent in a business's capital. To ensure that businesses in India, domestic and foreign, can run smoothly and find commercial success, the Indian Government launched the National Logistics Policy in 2022 to create the best industrial parks in India and supply chains in India.

The primary aim of the policy is to reduce the cost of logistics from a rate of 13-14% and match it to the level in developed countries. With logistics becoming cheaper, Indian products will be able to compete in domestic and international markets. The National Logistics Policy will streamline last-mile deliveries, mitigate transport-related issues and warehousing management and help save logistics companies time and money. From integrating digital systems and using high-end technology to enhancing infrastructure like roadways, railways, air travel and ports, the National Logistics Policy will help boost the warehousing market in India and improve the ease of doing business in the country with the best warehousing in India.

Multi-Modal Parks

As of 2017, India’s logistic costs were relatively high at 13% of the total price of goods. On the other hand, other major economies were dealing with logistics rates that were 8% of the final price of the goods. As a result, the Ministry of Road Transport and Highway set up a program to develop multi-modal logistics parks at select locations across the country under the Logistics Efficiency Enhancement Program (LEEP).

Multi-Modal Logistics Parks (MMLP) are 100-acre freight-handling facilities that provide access to various modes of transport, full-mechanised warehouses, storage solutions, inter-modal transfer terminals, and more. Additionally, such logistics parks offer customer clearance, testing facilities, management facilities and late-stage manufacturing activities. The MMLP programme helps streamline distribution warehouses in the country and brings it into the mainstream. With government-backed MMLPs flourishing across the country, more and more businesses will seek warehousing facilities that will help cut down on time and costs.

Gati Shakti Programme

The Indian Government has also launched the Gati Shakti Programme which aims to bring 16 ministries under one umbrella- a digital platform. The programme and associated digital platform will help boost connectivity across ministries in the Indian Government to improve planning. It will also enhance coordinated efforts to implement various infrastructure projects across the country. While the programme will focus on increasing connectivity between roadways and highways and multimodal connections, it will also entail the setting up of ULIP (Unified Logistic Interface Platform). ULIP will act as a single nationwide logistic platform and provide end-to-end visibility for industrial warehousing. From simplifying complicated procedures like filing for certifications and approvals to allowing for data exchange and greater transparency, ULIP will streamline logistics for businesses across all states. With such digital tools at one’s disposal, distribution warehouse will become easier and almost essential to running a business in the country.

Union Budget FY24-25

The Union Budget for the financial year lays out the plan for allocation of the nation’s budget. With the Union Budget for FY24-25 finalised, the logistics industry has much to celebrate with the allocation of INR 11 Lakh Cr. One of the major announcements is the introduction of three new railway corridors: the port connectivity corridor, the high-density traffic corridor, and the energy, mineral, and cement corridor. Falling under the purview of the Gati Shakti Plan, these corridors will help streamline freight movement to reduce transport time and cost for a smoother supply chain and warehouse business in India. To boost sustainability and cut costs in the logistics sector for warehouse companies, the Union Budget has also emphasised the manufacture of electrical vehicles and charging stations. Lastly, the Budget made allowance for a tax holiday of three years for start-ups with a turnover of less than Rs 100 crore in the first ten years of incorporation. Although the deadline for incorporation was March 2024, the Budget extended it for a year allowing companies to apply for tax breaks. This measure not only provides tax relief but also frees up funds the logistics industry can use to integrate AI and other innovative technology.

With the Indian Government pushing for India to become a 5 trillion USD economy, warehouse space has become more critical than ever before. From competing in the global markets to encouraging business owners to set up enterprises, the warehousing market is likely to flourish soon. Whether you’re a business owner or an investor looking for a warehouse in Mumbai, warehouse in Navi Mumbai, industrial plots, industrial land for sale in Mumbai, warehouse in Bhiwandi, warehouse in Taloja, warehouse in Kurla, warehouse in Thane, warehouse in Palava, warehouse companies in Mumbai and distribution centres in Mumbai, you can harness everything the warehouse market has to offer with the help of Lodha Industrial and Logistics Park (LILP) – Mumbai’s leading ESG-centric industrial park with world-class industrial development.