The future of warehousing in India

Whether it is keeping up with the digital transformation trend, building employment opportunities, or maintaining supply chain management both nationally and globally, the warehousing industry has evolved and continues to do so, observes Abhijit Verma, Executive Director & CEO, Avigna Group.

The warehousing sector is an inevitable pillar of India’s economy, keeping the momentum of global supply chain steady. It is one of the most resilient segments, when compared to others in the real estate sector. The warehousing industry has carved a niche of its own with the private players after receiving a positive boost from the implementation of GST, 100 per cent FDI through automatic route and being accorded with the government’s infrastructural status in 2017.  According to the report ‘Warehousing Market in India 2021’, the industry which valued at 1,050 billion in 2020 is expected to expand at a CAGR of 14.86 per cent between 2021 and 2025, taking the value to 2,028.86 billion by 2025.

As the warehousing spaces upgrade themselves from Grade-B and C to Grade-A facilities, the sector has been rapidly expanding its roots in the tier-II and tier-I cities. Grade-A warehouses accounted for only 3 per cent of all warehouses in 2015, but they now accounted for 10 per cent in 2019. This shows that the sector is not only growing, but getting more organised, overall quality of assets has improved due to which longevity, and safety and security has increased. Grade-A warehouses are almost at par with international standards in terms of quality, which is encouraging more investors to invest and attracting MNC clients who require such facilities. The pandemic, which brought everything to a total halt in the initial phase, eventually saw the industry rebounding.

The period witnessed the changing preferences from online to offline mode and companies transforming digitally to keep their businesses up and running, which in turn gave a boost to the warehousing sector. Like many sectors, warehousing is also experiencing various technological shifts at the digital front. Despite the rapid growth, we have to admit the warehousing sector is still at a nascent stage in India and one of the major challenges is skilled manpower. The demand for skilled workers has increased twofold as the industry moves towards automation, like every other. The sector definitely lacks trained manpower and upliftment is highly essential. Like many other sectors, though India’s entry is late in modern warehousing, we are fast adaptors and quick in learning the ropes of any trade, and hopefully will catch-up to the world’s standard in the next 2-3 years’ time.

A report published by TeamLease Logistics in 2018 indicated the creation of 120,000 incremental jobs in the warehousing sector from period 2018-2022. Clearly, going digital in some of its operations, and using an enhanced and efficient method of working has created some excellent job opportunities especially for the tech talent in India. AI technician, automation engineer and data engineer are some of the examples of job roles that are in demand.

Whether it is keeping up with the trend of digital transformation, building employment opportunities from blue to white collar levels, or maintaining supply chain management both nationally and globally, the warehousing industry has evolved and continues to do so.