FDI is revolutionising logistics and warehousing in India, says co-founder Jabong Praveen Sinha

Modi government has been aggressively trying to attract investments in the construction of physical infrastructure of India, logistics, and warehousing are expected to benefit the most.

NEW DELHI : India has witnessed a boom in its construction sector and is all set to become the world’s third-largest market by 2022. The Agility Emerging Market Logistics 2019 placed India in the second position whereas World Bank ranked the nation 44th in its Logistics Performance Index (LPI). This indicates the rapidly evolving and developing warehousing and logistics sector in India. Co-founder of Jabong and angel investor, Praveen Sinha has said that the vibrant business environment in India has attracted huge foreign investments, propelling fast economic development of the nation.

It has been projected that the construction of infrastructure in India will require over INR 50 trillion in the next few years and the government has been taking multiple steps to make it possible. “Warehousing and logistics are the ones which are going to exploit maximum in the years to come. Now when the vaccines are out and the Covid-19 shock is slowly fading away, the sector is back on the path. Moreover, the pandemic has made it more resilient and dynamic and it will prove to be a catalyst of unprecedented growth in the next five years,” says Praveen Sinha.

As per the data available, Grade A and Grade B warehouses in India grew at 18 percent CAGR in FY2018-20. Now, with the aggressive approach of the  Central government towards developing critical infrastructure and rising investments, warehousing is expected to grow over 20 percent CAGR in the coming next four years. “Post-pandemic, several industries will witness a boom that will have a direct impact on the rise of robust warehousing in India. FMCG and pharmaceuticals have an immense scope of growth and the major players are likely to strengthen their supply chains. Hence, don’t be surprised to see the construction of multiple mega logistics parks across India.”

100 percent FDI in storage and warehousing has opened up an immense opportunity for global players to exploit the flourishing business environment in India.

Recently, ESR India has signed an agreement with the government of Maharashtra to invest INR 4,310 crore in the sector. The Warburg Pincus-backed firm agreed to set up 11 logistics and industrial parks around Pune and Mumbai.  Praveen Sinha said that Maharashtra in particular, with its robust logistics infrastructure and business-friendly environment, has been attracting huge investments.

“Maharashtra has done a magnificent job. But not just limited to it, we will have to make every state business-friendly to fetch sustainable and evenly spread development goals.”

“What’s interesting is the rise of the rural market in India. With increasing disposable income, the retail sector in the rural areas has been rapidly increasing paving the way for a strong logistic network in the peripheries of India. We have witnessed a huge influx of foreign investments and it is revolutionizing the sector. However, we still need a lot of investments to achieve the mammoth goal that is there in front of us.”

Praveen Sinha is a serial entrepreneur and is known for his divergent business approach. A seasoned market analyst, he is known for pioneering the e-commerce sector in India through Jabong.com.

Source : Get India News