Warehousing in India Observes High Demand, Proves China+1 Goes Beyond Manufacturing

In southern India’s sprawling industrial parks, a frenzy is underway. Workers hustle to erect modern warehouses and factories, responding to the growing demand from companies either capitalizing on India’s economic surge or diversifying their supply chains away from China.

One such hotspot is the Greenbase Industrial Park, situated near manufacturing facilities operated by industry giants like Foxconn and Daimler. Closely placed industry sources spill that the park has become a magnet for European and American companies eyeing India for expansion. Inquiries for leasing space have surged, with talks underway with multiple clients looking to relocate from China.

To meet this escalating demand, Greenbase plans to invest a staggering USD 800 million to expand its industrial park space to 20 million square feet. This move reflects the broader trend of a rush for leased warehouse space in India, driven by the country’s economic growth outpacing advanced nations.

In the current scenario, conventional warehouses would be rather ill-suited for the needs of foreign industrial giants that the Modi government aims to attract. Therefore, real estate developers are scouting nationwide for land, grappling with acquisition challenges as they prepare to invest millions in the creation of new, world-class infrastructure. While the supply of tech-laden and intelligent Grade-A warehousing has seen an uptick lately, it is all set to boom in the near future.

The appeal of India as a manufacturing hub has grown, especially among firms seeking to expand beyond China amid escalating global tensions. Additionally, the booming e-commerce and manufacturing sectors view India as an export hub, tapping into both international and domestic markets.

Foreign developers are also making significant investments in India’s warehousing sector. U.S.-based Panattoni, for example, is constructing its first warehouse complex near New Delhi, capitalizing on the country’s robust infrastructure development. Panattoni’s entry underscores India’s potential for growth, with vast opportunities yet to be fully tapped.

However, the road to expansion is not without hurdles. Complex land acquisition issues, fueled by soaring demand and limited availability, pose challenges for developers. Land prices have surged, squeezing developers’ margins as they grapple with fragmented ownership structures and lengthy acquisition processes.

Despite these challenges, the momentum in India’s warehousing sector remains strong. With businesses increasingly looking towards India as a viable alternative to China, developers and investors alike are poised to capitalize on the country’s burgeoning opportunities.

As the global landscape continues to evolve, India’s warehousing sector stands at the forefront of the nation’s economic transformation, offering a glimpse into the country’s potential as a key player in the global supply chain network.

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