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Guest Column

As Indian Logistics Industry thrives, Goa is set to be an Ideal Warehouse Hub 

By: Ankit Kansal, Founder, Axon Developers

As the Indian manufacturing sector is expanding and demand for e-commerce is jumping, the warehousing sector in India will continue to thrive. The current size of warehousing is close to 330 million Sq Ft and is expected to reach 700 million by 2030, growing at a CAGR of 11.3%. The demand for warehousing will stem from manufacturing & e-commerce alongside the scorching pace at which freight forwarders and 3rd party logistic companies are growing forward.

The Indian government is also taking initiatives toward building a robust logistics and warehousing infrastructure. It unveiled the warehouse policy in India in 2022 with a key focus on developing industrial warehouses, cold chain infrastructure, and storage centers. In tandem, it is strengthening the overall logistic sector with an elevated investment in shipping lines, highways, railway corridors, etc. Similarly, the governing agencies are racking up investments in inland waterways, greenfield airports, modernization of shipping ports, etc.

The thrust towards Manufacturing Industry

India is building powerful capabilities in manufacturing with the help of increased investments, attractive policy impetus, and improving the overall business climate. It aims at taking the share of manufacturing to 25% of the overall economy from the current 17%. Already the country has proven expertise in automotive, automotive parts, generic pharma, textile, basic chemicals, etc. It is now planning to deepen its foothold into other viable segments such as smartphones, electronic appliances, processed food, biosimilar, industrial textiles, engineering goods, petrochemicals, and defence equipment.

The country has introduced attractive PLIs in multiple sectors such as food processing, smartphones, pharma, textile, ISO container ports, etc. As manufacturing expands, it will feed into increased demand for warehouses, cold chains, etc.

As manufacturing is growing, India is also deepening its footprint in the global supply chain. In FY 23, the total merchandise exports from India have risen to 447.5 billion from USD 422 billion in FY 22. In the same time period, the imports have crossed USD 700 billion. As Exim trade is rising, it will further push demand for warehousing and other allied verticals such as Inland Container Depots (ICDs), Container Freight Stations (CFS), multi-modal logistics systems, etc.

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Goa the next Potential Warehousing Hub in India

When it comes to the coastal state of Goa, the discussions mostly revolve around tourism, nightlife, hospitality, and real estate markets. However, the state has tremendous potential to don a critical role as a node in India’s booming logistic sector.

It already has a major port in Marmurgao with a capacity of 7 million tonnes, besides a minor port in Panjim. Though there is no cargo capacity in the Dabolim port, there is a dedicated cargo facility at the newly built MOPA airport. In the foreseeable future, the MOPA airport will handle around 37,000 tonnes of cargo annually, out of which around 60% will be international in nature.

Recently a new ICD has been unveiled at Balli with a total capacity of around 30 trains. Goa also has an operational inland waterway cargo network which is seamlessly connected to the port at Marmurgao. Its network of 6 river lines is effective in handling mineral ores, iron, agricultural products, etc. Inland riverways are a cost-effective and sustainable mode of transport and the state government is smartly utilizing it.

To further scale up the warehousing & logistics business, the state government has recently introduced dedicated policies.  Industry status has been granted to warehouse and logistics in Goa. As per the logistics policy, 20% of the existing industrial land will be offered to develop the logistics business. The government has also introduced favourable policies which include subsidies and discounts to develop warehouses and cold chains. A 15% subsidy will be offered to private players in paying interest on loans.

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Guidelines will be proposed to increase the FSI to 200%. A simpler approval process will be put in place to help entrepreneurs quickly start warehousing businesses. Likewise, investments will be directed towards fastening the transport of farm products to markets.

This will result in a steep jump in demand for warehouses. A new beginning surely waits for Goa’s warehousing sector. The coastal state is set to play a critical role in India’s logistic and warehousing roadmap.

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