Warehousing industry in India- what should you know

Warehousing industry in India- what should you know

Warehousing primarily refers to the storage of inbound or outbound goods that are generally transported to their designated destinations. The warehousing and storage industry consists of organizations or establishments that supervise the operations of warehouses and storage facilities for general merchandise, refrigerated goods, and other products that are stored in a warehouse. Warehouses are one of the most indispensable fractions of the rapidly expanding logistics industry. The present scenario has seen the warehousing operations evolve from just providing storage for goods to providing additional value-added services like packing, sorting, blending, processing and shipping. Modern houses have become absolutely essential for the storage of perishable supplies with the advent of new technology and the evolution of the organized retail sector.

Warehousing industry against the Indian landscape :

The warehousing sector of India is highly disintegrated with most of the warehouses having an area that is less than 10.000 feet. More than 90% of the warehouses in India are under the direct supervision of unorganized authorities. These warehouses tend to be smaller in size with the limited scope of automation or mechanizations. Fragmented warehousing footprint leads to higher average inventory holding which results in extreme cases of storage and handling loss led by lower levels of mechanization.

Warehouses have formed one of the most crucial elements of the Indian logistics industry. The evolution of organized retail sectors has seen the growth of warehouses into essential storage facilities for stockpiling perishable items. The Indian Government has been thoroughly instrumental in introducing newer initiatives that promote the growth of warehouses in the country. Different measures such as the initiation of the Warehousing Act of 2007, pouring investments in the establishment of logistics parks, introduction of Free Trade Warehouse Zones (FTWZs) along with the commencement of the Goods and Services Tax (GST) have positively stimulated the growth of the warehousing industry in general. Predicting the immense scope of growth of the warehousing sector, both domestic and international private establishments have ventured with an objective to bring parity in the cost and efficiency of the warehousing operations. 

Indian warehousing segments and their places of concentration:

Almost 60% of the technologically advanced warehouses in India are concentrated in the top metropolitan cities namely Ahmedabad, Bengaluru, Chennai, Mumbai, NVR and Pune. Apart from these six, Hyderabad and Kolkata are the two other notable cities with major warehousing capacity. 

The major reason for this is the high rate of concentration of industrial activities and the existence of a substantial amount of urban population around these regions. Other factors like the presence of quality infrastructure and good access to skilled labor facilitate this expansion of the warehousing industry. 

The major portions of the Indian warehousing industry are dominated by the following :


  • Industrial and Retail, which covers almost 55% of the domestic warehousing industry
  • Agricultural, which amounts to almost 15% of the industry
  • Cold Storage, which encompasses almost 16% of the industry and 
  • CFS/ICD, which amounts to almost 14% of the entire industry.


Apart from the Agricultural warehousing sector, the rest of the warehousing industry is majorly controlled by private sector organizations. About 75% of the warehouses belonging to the agricultural sector is primarily controlled by Government entities whose sole purpose is to ensure food security and storage of essential food crops.

The growing prospect of the warehousing industry in India :

A crucial trend that is on the rise currently is the pressing demand for warehouses and logistics space in tier two cities like Coimbatore, Lucknow, Guwahati, Jaipur, and Ludhiana. 

Warehousing Industry development in 2018 and their prospect in the future : 

The past year of 2018 has observed a 22% year-on-year growth in the entire stock of Grade A and Grade B warehousing space in the top right cities at 169 million sq feet in comparison to 138 million sq feet that was recorded during the previous year. Absorption displayed an unparalleled growth rate of 60%. The 20 million sq feet that were recorded in 2017 increased to 32 million sq feet in 2018. The significant amount of growth emphasized the excessive demand which had by far outgrown supply and as a result, the vacancies dropped below 10%.

The 24% increase in the share of total platform level investments in India proves that the warehousing and industrial segment will retain strong momentum in 2019 and in 2020.


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