How government-led infrastructure development & policies are strengthening warehousing and distribution in India

India’s warehousing sector has emerged as an important pillar for the growth of country’s logistics and supply chain, supported by rising consumption, digital adoption, and policy-led infrastructure development. According to Grant Thornton Bharat report, the warehousing sector is growing at a CAGR of 15.64% and expected to reach $35 billion by 2027. Initiatives such as the National Logistics Policy, PM Gati Shakti, development of Dedicated Freight Corridors, and 100% FDI liberalisation are creating integrated, multimodal ecosystems. These reforms are not only improving connectivity but also enabling the shift to modern, sustainable, and scalable solutions that support India’s broader economic growth objectives.

The growth in demand for warehousing and distribution has been driven by the rising demand for express deliveries and a range of regulatory policy reforms undertaken by the government to facilitate the same. For instance, the goods and services tax (GST) introduced in 2017 was a landmark reform that enabled a hassle-free transportation experience with minimal documentation required for crossing states. Since it has led to an elimination of interstate tax barriers, companies have been empowered to consolidate operations into fewer, centrally located large warehouses. By reducing the number of small and inefficient warehouses, it has increased the overall capacity of operational and organised warehouses. The implementation of e-way bill in 2018 has further removed the complexities and time-consuming processes associated with multiple checkpoints. This shift has reduced transit times and enhanced supply chain efficiency by creating a smooth distribution network.

In 2022, the government of India launched National Logistics Policy focused on the holistic development of the sector by creating a robust physical as well as digital infrastructure. A key component of this initiative is the ongoing development of 35 Multimodal Logistics Parks (MMLPs). These MMLPs are strategically designed as unified freight hubs that offer a comprehensive range of services, from modern warehousing to various value-added logistics solutions. By amalgamating different modes of transport, the MMLPs significantly enhance overall logistics and supply chain management efficiency, directly facilitating the growth and modernisation of India’s warehousing landscape.

Key infrastructure programs such as PM Gati Shakti, Bharatmala, and Sagarmala are strengthening connectivity across highways, ports, and industrial corridors laying the groundwork for efficient warehousing clusters. Another exemplary initiative has been the launch of Dedicated Freight Corridors which have now enabled smooth running of around 400 freight trains daily on a high-speed corridor. This has not just cut cargo transit time but also reduced long haul costs and improve supply chain reliability.

Foreign capital has also played a transformative role. With 100% FDI allowed in warehousing and logistics under the automatic route, global logistics players have brought in new-age infrastructure and best practices. From automated storage and retrieval systems to AI-based warehouse management solutions, India is actively deploying new-age technologies to enhance efficiency of warehouses, while making them adept and sustainable.

Apart from the government’s initiatives, the accelerated growth of e-commerce growth in India especially during & post Covid-19 era has continued to remain a major driver for the increased demand for warehouses. To meet the requirement of e-commerce deliveries, fulfilment centres and last mile delivery hubs are expanding across the country, especially in Tier 2 and Tier 3 cities, where leasing activity has grown year on year. Additionally, cold storage and pharmaceutical warehousing segments are also gaining momentum due to the increasing demand for perishable goods and temperature-sensitive healthcare products like vaccines. The share of Grade A warehousing facilities with modern design, safety and automation features is on the rise, reflecting the industry’s move toward high – quality, scalable infrastructure.Today, India’s warehousing sector is turning into a modern, efficient, and globally competitive industry led by Indian government’s emphasis on building a seamless logistics network and private sector’s focus on creating advanced warehousing facilities in India. With strong policy backing, digital adoption, and private investment, India is building a warehousing ecosystem that not only meets current demand but also supports its ambition to become a global manufacturing and trade hub. As the sector continues to scale, integrating sustainable practices, enhancing skills through required training and development, and seamless connectivity will be critical for long-term resilience and economic contribution.

The writer is Global Business Executive, CJ Darcl Logistics Ltd.