Think be­yond four walls

Cargo Talk - - From The Editor - Ru­pali Narasimhan Ed­i­to­rial Di­rec­tor

The mod­ern and sci­en­tific ware­hous­ing in­dus­try in In­dia has yet to take off. Presently, the sec­tor is ut­terly un­or­gan­ised. In­dia has a to­tal ware­hous­ing space of about 1,800 mil­lion sqft, of which only 8 per cent (144 mil­lion sqft) is in the or­gan­ised sec­tor. How­ever, re­cent re­searches es­ti­mate In­dian ware­hous­ing sec­tor will grow at the rate of 35-40 per cent an­nu­ally to be­come ap­prox­i­mately US$ 60 bil­lion in­dus­try by 2012. Cur­rently, ware­hous­ing ac­tiv­i­ties ac­count for about 20 per cent of the to­tal In­dian lo­gis­tics in­dus­try. Lat­est trends show that there is a huge po­ten­tial for a large amount of qual­ity ware­hous­ing space. Rapid growth of or­gan­ised re­tail and in­creas­ing man­u­fac­tur­ing ac­tiv­i­ties in In­dia are the key de­mand gen­er­a­tors for ware­hous­ing space in In­dia. In ad­di­tion, e-Com­merce op­tion is also driv­ing the ware­hous­ing de­mand. Fur­ther, the rise of do­mes­tic con­sump­tion and in­ter­na­tional trade is pro­vid­ing huge im­pe­tus to the growth in ware­hous­ing mar­ket. Sig­nif­i­cantly, con­tainer­ised cargo traf­fic which leads to the growth in CFSs and ICDs adds on to the growth in ware­hous­ing sec­tor. On the flip side, there are plenty of chal­lenges. In­ad­e­quate phys­i­cal in­fra­struc­ture, lack of land avail­abil­ity, highly un­or­gan­ised and frag­mented mar­ket, lack of stan­dard­i­s­a­tion, com­plex tax regime, lack of power sup­ply and in­creas­ing cost, and high costs in ware­hous­ing would be a ma­jor area of con­cern for prospec­tive in­vestors. More­over, op­er­a­tional chal­lenges such as sup­ply chain in­ef­fi­ciency, lack of skilled man­power, in­ef­fi­cient ma­te­rial han­dling and lack of IT pen­e­tra­tion need to be re­solved by ware­hous­ing op­er­a­tors to cater to the fu­ture de­mand. An ef­fec­tive Na­tional Pol­icy on Han­dling, Stor­age and Trans­porta­tion, early shift to GST tax regime, Ware­hous­ing Act, en­cour­age­ment of pri­vate in­vest­ment in lo­gis­tics parks and FTWZs by of­fer­ing tax ben­e­fits, in­fras­truc­tural developments and fast de­vel­op­ment of the Ded­i­cated Freight Cor­ri­dor would also be the de­sired ini­tia­tives from gov­ern­ment to bring the ware­hous­ing/lo­gis­tics in­dus­try be­yond the four walls.

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