India, a strategic market for international shipping, during the pandemic has been bagging many investments from brands across the globe. In a recent development, Japan’s Hitachi Transport System has announced that it will spend roughly 12 billion yen ($108 million) to build four logistics centres in India.
The global logistics service provider is looking to open the said four sites in Chennai and Mumbai next year, followed by centres in Delhi and Bangalore in 2025 or 2026.
Construction for the two centres in Chennai and Mumbai has already begun, with total floor space covering 40,000 to 50,000 sq. meters.
The logistics centres will facilitate the transport of automotive and electronic components. Several other automakers and manufacturers from Japan, Europe and South Korea already have a presence in all four cities. Hitachi Transport with its investment intends to build a distribution network in a market seen serving as a foothold for expansion to the Middle East and elsewhere.
Earlier in 2010, Hitachi Transport acquired Flyjac Logistics for about $45 million, looking to make use of a transport network connecting Flyjac’s 25 locations around India. However, much to its disappointment the freight volumes did not rise as anticipated, as a result of India’s complicated tax system on the logistics industry.
India has become “a more important market as a logistics hub going in multiple directions,” said an executive at a major logistics company. Hitachi Transport will expand its distribution network to pursue this demand.
Many other global logistics companies are also upgrading operations in India. Japan’s Nippon Express lifted investment in the country by 50% annually for three consecutive years through 2020. Deutsche Post DHL will open a new gateway facility for imports and exports near Bangalore’s airport this fiscal year.
Source: NIKKEI Asia