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India's e-commerce surge is reshaping the country's warehousing landscape, with Tier II and III cities emerging as key hubs, according to a report by global real estate consultancy JLL.
The report highlights how the growing 'click-and-buy' trend drives demand for modern storage and distribution facilities beyond metropolitan areas. The report highlighted that the companies also set up smaller warehouses in these cities to improve delivery times and reduce logistics costs. These cities also offer access to larger spaces due to lower population density, ideal for warehouses near consumption centers, it added. As of 2024, India's total warehousing stock has reached 533.1 million sq. ft, with emerging Tier II-III cities now contributing approximately 100 million sq. ft, or about 18.7 per cent of the total stock, according to the report. The report termed this shift as a "fundamental change" in the country's logistics map towards a hub-and-spoke model as envisioned during the implementation of Goods and Service Tax (GST). "The Indian warehousing market has experienced remarkable growth in major cities since implementation of GST. Growth is now expanding to emerging Tier II-III cities as hub and spoke model is playing out. The emerging cities saw noteworthy100 million sq. ft. of stock in 2024, a fourfold increase since 2017," said Yogesh Shevade, Head - Logistics & Industrial, India, JLL. "At JLL, we anticipate this momentum continuing, fueled by critical infrastructure initiatives that are linking these emerging cities with major consumption hubs. This rapid development is creating investment opportunities for both investors and developers in the logistics sector. This trend is not just reshaping India's logistics landscape, but also offering decent returns for those ready to capitalize on this burgeoning market," Shevade said. Concurrently, the report added that the infrastructure initiatives such as PM Gati Shakti, Bharatmala, Sagarmala, UDAN Scheme, and the development of freight corridors have optimised distribution networks which are helping the sector. Programs such as Make in India, Digital India, and the National Logistics Policy have fostered conducive manufacturing ecosystems across the country, the report added. The introduction of Production-Linked Incentives (PLI) and Design-Linked Incentives (DLI) schemes has incentivised companies to set up manufacturing facilities in these cities, as per the report. (ANI)
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