Union Budget 2023 : Warehousing and Logistic sector to get a considerable boost

NEW DELHI : The Warehousing and Logistic sector is expected to get a considerable boost from the government with the government’s proposal in the Union Budget 2023-2024 focussing on the infrastructure development and an all-time high capital expenditure in making India a globally connected economy.

In the budget announcement the FM has mentioned that the infrastructure spend is up by 33% to 10 lakh Cr, which forms 3.3% of GDP this year.

“We believe that the increase in Capex and resulting infrastructure development will also ease the development of warehousing and attract investment from the private sector, wishing to capitalise in this development,” said Anshul Singhal, Managing Director, Welspun One Logistics Parks.

The investment in capex to the tune of 4.5% of the total GDP is expected to further boost land prices and attract more investors with the demand for warehousing space likely to increase as consumption goes up especially in Tier 2 and Tier 3 cities.

Additionally the Urban Infrastructure Development Fund that will be set up in Tier 2 and 3 cities will add to an increased demand for Grade A warehousing for this market.

The budget also supported energy transition. By allocating Ministry of Petroleum and Natural Gas a capital investment of Rs. 35,000 crore to support the energy transition, the net zero aim, and energy security.

“Given that India is actively working toward achieving its net zero target by 2070, it will have a huge influence on the infrastructure and logistics sectors in India. The National Green Hydrogen Mission, which has a budget of 19,700 Crores, will make it easier to shift the economy into one that has low carbon intensity, reduce reliance on fossil fuel inputs, and establish the nation as the market and technological leader in this emerging industry,” said Amrutesh Reddy, Managing Director, NDR Warehousing

“The Union Budget by the FM is a well-defined one with a clear focus on infrastructure development, green initiatives, inclusivity, and upskilling. The government’s initiative to strengthen transport infra projects by revitalizing 50 additional airports, heliports, water aerodromes, and advanced landing zones, along with 100 critical transport infra projects with an investment of Rs75,000 crore including Rs 15,000 crore from private sources, are all massive steps in enabling the logistics sector. For players like us, who are looking at growth into tier 3 and 4 regions, this infrastructure push will be instrumental in creating cost-effective supply chains as well as drive overall market growth. The focus on agriculture and food co-operatives with decentralized storage facilities, green operations, and energy transition to hydrogen power, are further aspects that will positively push the warehousing sector to adopt sustainable practices. Reduction in import duties for the lithium-ion battery will further help faster EV adoption, boosting greener supply chains. Overall, the union budget is a strong step towards helping India to become a global economy with industry best practices that will put the logistic and cold supply chain in the forefront, at par with international economies.” said Mr. Varun Gada, Director, LP Logiscience- A Liladhar Pasoo Company.

“The budget announced  is a strategic one, with a clear focus on infrastructure development, agriculture, and farmer empowerment, as well as inclusive growth and upskilling. Specifically, the push for building transport infra projects with 50 additional airports, heliports, water aerodromes, and advanced landing zones which will be revitalised along with 100 critical transport infra projects with an investment of Rs75,000 crore including Rs 15,000 crore from private sources, are commendable and will strengthen the sector, and are in alignment with the goals of the NLP. Another aspect of the budget that focused on the support for agriculture and farmer empowerment, setting up of food co-operatives and decentralised storage facilities, are all vital factors that will go a long way in enabling smoother food supply chains that can benefit farmers and drive effective food distribution. Further, the revamped credit guarantee scheme through the infusion of Rs 9,000 crore in the corpus, will help strengthen the start-up and MSME sector, enabling them to gain access to additional collateral-free credit. Overall, the push for greener practices, including the transition to green energy and lithium-ion battery-based sources will further accelerate EV manufacturing and adoption, boosting greener supply chains, which is a commendable step. Apart from helping India move towards its goals for india@100, these initiatives will also help put the logistic and cold supply chain in the forefront, at par with international economies.” said Mr. Swarup Bose, Founder & CEO of Celcius Logistics.