What role does warehousing sector play in supply chain of India

To understand the significance of the warehousing sector, let us first define supply chain and how it works:

A supply chain is the network that connects all of the people, organizations, resources, activities, and technology involved in the manufacture and sale of a product. A supply chain includes everything from the transfer of raw materials from a supplier to a producer to the final distribution to the end customer. The distribution channel is the supply chain segment responsible for getting the finished product from the manufacturer to the consumer.

However before the distribution the goods are retained in the warehousing, wherein it plays a critical role.

The importance of the warehousing and logistics sector in the economy is demonstrated by its role during the Covid-19 pandemic. Adequate warehouse facilities, together with an efficient logistics network, are critical to maintaining the flow of commodities and meeting consumer demand across the country. The critical role of the warehousing sector is also recognized in the National Logistics Policy (‘NLP’) and is being given due creditability by both the Central and State governments, with NLP expected to enhance warehousing capacity and enable faster communication to bring products closer to their consumption points.

The warehousing sector has grown at a CAGR of around 23% over the last five years and is predicted to increase at a CAGR of 19% by FY 2026. Growing online retailing, as well as rising customer demand, has paved the way for businesses to ensure efficient availability of goods, hence ensuring the availability of efficient quality warehouses, referred to as Grade A warehouses.

With the emergence of e-commerce and a desire to rebuild supply chains globally in a post-pandemic world, the demand for enough and quality warehousing that is sustainable and robust is more vital than ever. It is therefore critical that the warehouse sector evolve to meet the needs of a fast increasing economy and address the need for suitable facilities to support increased economic activity as well as ancillary demand. Furthermore, it is imperative to assess developing trends in storage, technological adoption, and legislative efforts that can aid in realizing the sector’s entire potential in India.

Thus, the necessity and need for high-quality warehouses is growing every day, because whether it is FMCG goods, agri products, or food items, the storage requirements for product sustainability and consumer convenience never go away.

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