India Warehousing and Logistics Market Expands, Driven by Surge in Cold Chain and Technological Advancements

In 2023, India took the lead in expanding the warehousing and cold chain markets across the Asia Pacific region, foreseeing an addition of over 30 million square meters. This expansion is prominently driven by key cities such as Bengaluru, Delhi-NCR, and Mumbai, which have emerged as frontrunners in this surge. Notably, this growth trajectory has led to a surge in rental rates in 2023.

This demonstrates the pivotal role that the Indian WIL (Warehousing, Industrial, and Logistics) sector plays not only in the domestic economy but also in regional dynamics, positioning India as a significant player in the global supply chain landscape.

India's aspiration of achieving a USD 5 trillion economy by FY25 hinges significantly on the Warehousing, Industrial, and Logistics (WIL) sector. The warehouse and logistics industry, in particular, has witnessed remarkable growth, largely propelled by the COVID-19 pandemic's influence. According to projections from Makreo Research, nearly 40% of organized warehouses are expected to transition into smart warehouses by 2030.

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►India Warehousing and Cold Chain Market Size and Forecast (2018-2030)
https://www.makreo.com/report/india-warehousing-cold-chain-market-size-forecast-2018-2030

► India's Growing Role as a Global Cold Chain Hub
India's potential as a global hub for the cold chain has become increasingly apparent, especially in recent years. The onset of the pandemic further accelerated this trend, leading to a remarkable surge in the cold chain sector within the country.

► India's Growing Role as a Global Cold Chain Hub
India's potential as a global hub for the cold chain has become increasingly apparent, especially in recent years. The onset of the pandemic further accelerated this trend, leading to a remarkable surge in the cold chain sector within the country.

► Drivers of Rental Growth in the Warehousing Sector
The rise in demand from the manufacturing sector, coupled with the anticipated resurgence in space uptake by e-commerce entities, is forecasted to be the primary drivers behind the rental growth in the coming years. Notably, Bengaluru, ranking 6th in the APAC logistics market, witnessed a substantial 7.5% year-on-year growth in rents. This growth pushed rental rates to INR 21.50 per square foot per month, compared to INR 20 per square foot per month in the previous year. Furthermore, the city saw a significant drop in vacancy levels, decreasing from 28.2% to 15.8%.

► Concentration of Grade A Warehousing in Pune and Chennai
Pune and Chennai stand out with the highest concentration of Grade A warehousing, primarily due to their substantial demand from auto and auto ancillary occupiers. The upward trajectory in Grade A development persisted in FY 2022, as developers shifted their focus towards constructing higher-grade parks in adherence to contemporary norms. This move aims to cater to the increased throughput requirements of modern businesses. Moreover, there's a growing emphasis on enhancing the aesthetics of these warehousing parks to foster a better working environment, reflecting the evolving needs of the industry.

► Investment Influx and Anticipated Supply Growth in India's Warehousing Sector
In recent years, the warehousing sector in India has witnessed a significant influx of investments. Projections indicate that India is poised to generate enough supply to meet the demand for 223 million square feet of Grade-A warehousing space within the next three years.

► Cost-Efficiency and Benefits of Grade A Warehouses
Grade A warehouses command higher rents compared to their Grade B and C counterparts due to their elevated construction costs. However, when considering various factors such as rental rates, storage capacity, cargo handling capacity, and pallet capacity in relation to volume, Grade A warehouses demonstrate greater cost-efficiency. This underscores the value proposition offered by Grade A facilities in the Indian warehousing landscape.

► Evolution of Warehousing Services Post-Pandemic
Before the pandemic, Generalized Warehousing Services held a significant presence in India. However, following the onset of the pandemic, specialized and refrigerated/cold storage services experienced a surge, aligning with India's emergence as a manufacturing hub. The rise in demand from pharmaceuticals, FMCG, and chemicals sectors has further propelled growth in the warehouse and cold chain market. Despite this surge, Generalized services have maintained steady growth, reflecting the diversified nature of the warehousing sector.

► Increasing Demand for Technologically Advanced Warehousing Facilities
The demand for modern and technologically advanced warehousing facilities is on the rise, particularly in Tier 1 cities. These facilities are equipped with innovative technologies such as automation, robotics, IoT, and RFID systems. Such advancements enhance efficiency, accuracy, and inventory management, meeting the evolving needs of businesses operating in the dynamic Indian market.

► Potential for Multi-Storey Warehousing
The Indian warehousing market holds the potential to transition towards multi-storey warehousing, driven by the rising demand from the e-commerce sector to establish proximity to their consumer base and efficiently utilize available land. This shift could trigger a surge in demand for technologically advanced multi-storey warehouses, optimizing land usage in cities with limited land supply and assisting companies in reducing transportation costs and time. Cities like Mumbai, Bengaluru, and Kolkata, facing constrained land supply and higher land rates, are particularly poised to attract multi-storey warehouses.

► Challenges and Future Considerations in Indian Warehousing
Despite the growth prospects, the Indian warehousing sector faces challenges and must address future considerations to sustain its momentum.

Currently, the permissible Floor Space Index (FSI) for warehousing in Indian cities falls short of the desired FSI for multi-storey warehousing. This limitation inhibits warehouses from reaching optimal heights, thereby impeding cost optimization. However, as population density increases, space constraints intensify, and land prices escalate, the Indian warehousing market may witness the emergence of multi-storey warehousing systems in the foreseeable future.

The future outlook for India's manufacturing sector appears promising, poised for significant growth and transformation. The ongoing shift towards e-commerce, increasing urbanization, and evolving consumer preferences are key drivers propelling this growth. As a result, the demand for efficient and technologically advanced warehousing facilities is expected to surge.

Expansion beyond Tier 1 cities into Tier 2 and Tier 3 locations will continue to gain momentum. This expansion is primarily driven by the need to cater to regional demand and optimize logistics networks. As businesses seek to penetrate new markets and establish robust supply chains, the significance of warehousing infrastructure in non-metro areas will grow. This trend underscores the evolving dynamics of the Indian warehousing landscape.

► Scope of India Warehousing and Cold Storage Market
Makreo Research has recently released an in-depth report titled "India Warehousing and Cold Chain Market Size and Forecast (2018-2030) - Focus on Warehouse Market By Structure, Services, Ownership, Size, Industry and Major Cities." This comprehensive report provides a detailed overview of the Indian Warehousing and Cold Chain Market, which is expected to experience significant growth from 2018 to 2030. The summary offers a succinct insight into the India Warehousing and Cold Chain Market, highlighting revenue trends across various dimensions. The thorough analysis encompasses a wide range of factors, assisting stakeholders in making strategic decisions and positioning themselves in the market from 2018 to 2030. The report places particular emphasis on key players with a strong presence in the industry, providing an overview of their financial and business performance, including details on mergers, acquisitions, and funding timelines. This extensive compilation of information aims to equip stakeholders and industry professionals with a comprehensive understanding of the developments unfolding in this rapidly evolving industry.

Sections Covered: Assessment of Warehousing and cold chain Markets, covering the Following Aspects:
India Warehousing Market by Services:
■ Generalized
■ Specialized
■ Cold Chain

India Warehousing Market by Structure
■ Organized
■ Unorganized

India Warehousing Market by Ownership
■ Public Warehouse
■ Private Warehouse

India Warehousing Market by Size
■ Grade A
■ Grade B

India Warehousing Market by Cities

India Warehousing Industry : Companies Covered
■ Gati Ltd.
■ Mahindra Logistics
■ Central Warehousing Corporation
■ Snowman Logistics Ltd.
■ FM Logistic India
■ Gubba Cold Storage Ltd.
■ TCI Express

Key Questions Answered
1. What is the overall size and growth trajectory of the India Warehousing and Cold Chain Market from 2018 to 2030?
2. How is the market revenue distributed among Generalized, Specialized and Cold Chain warehouse structures?
3. What are the revenue trends based on industry-specific demands and which sectors are driving the demand for warehousing services?
4. How does infrastructure development, including technological advancements and facility improvements, influence the warehousing and cold chain market?
5. What is the breakdown of market revenue based on warehouse size categories and what are the preferences across different storage capacities?
6. How is the market revenue distributed among Generalized, Specialized, and Cold Chain services?
7. What is the revenue distribution based on ownership structures, including privately-owned and publicly-owned operated warehouses?
8. How does market revenue vary across major cities in India, and what are the regional growth patterns?
9. Who are the key players in the India Warehousing and Cold Chain Market, and what are their profiles, market share, and strategies?
10. What are the primary challenges faced by the warehousing and cold chain industry in India?
11. What opportunities exist for stakeholders in the evolving market landscape?
12. What are the potential threats to the warehousing and cold chain market, and how can they be mitigated?

Related Reports:
Global Warehousing and Cold Storage Market Size and Forecast (2020-2030)
https://www.makreo.com/report/global-warehousing-and-cold-storage-market-size-and-forecast-2020-2030

Germany Warehousing and Cold Storage Market Size and Forecast (2020-2030) - Focus on Warehouse Market By Type, Industries and Major Cities
https://www.makreo.com/report/germany-warehousing-cold-storage-market-size-forecast-2020-2030

Qatar Logistics and Warehousing Market Analysis & Forecast (2018-2028)
https://www.makreo.com/report/qatar-logistics-and-warehousing-market-analysis-forecast-2018-2028-second-edition

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Makreo Research, a dynamic full-service research and consulting firm located in Mumbai, is dedicated to reshaping the research landscape and delivering comprehensive solutions to intricate business challenges.

Our mission is to streamline the ever-changing economic landscape and intricate market dynamics, leveraging brilliant minds and cutting-edge technology to make a substantial difference in the realm of business and decision-making.

This release was published on openPR.