Union Finance Minister Nirmala Sitharaman has announced a slew of initiatives to boost India’s manufacturing sector and at the same time to create infrastructure to improve connectivity and reduce logistics costs.
Industrial parks to boost industrial activities
In her Budget speech for 2024-25, the finance minister emphasised the development of India’s industries by announcing the creation of 12 new industrial parks under the National Industrial Corridor Development Programme. These parks will feature comprehensive infrastructure and will include “plug and play” facilities.
Additionally, the minister revealed plans to sanction similar parks in or near 100 cities, ensuring they are investment-ready and equipped with all necessary amenities to support various industrial activities. This initiative aims to bolster industrial growth and enhance the ease of doing business in India.
The National Industrial Corridor Development Programme is a central government initiative aimed at developing new industrial cities as “Smart Cities,” incorporating the latest technologies to enhance efficiency and sustainability. These corridors serve as the transportation backbone of India, facilitating seamless movement of goods and boosting economic activity by linking industrial hubs with major markets.
The programme is designed to create state-of-the-art infrastructure, attract investment, and drive economic growth by transforming selected regions into advanced industrial and commercial centers.
Increase the demand for warehousing
According to industry experts, the announcement of setting up industrial parks will give a significant boost to the warehousing sector. With warehousing being one of the critical components of the logistics ecosystem, it will help in significantly reduce logistics cost.
Sandeep Chadha, Founder & CEO, Warehouster opined that the creation of new industrial parks will boost the country’s warehousing sector. “This expansion caters to the booming e-commerce market and the growing need for efficient storage. The warehousing industry is expected to reach 500 million sqft by 2025, and these parks will provide much-needed high-quality space. Modern facilities with sustainable practices will improve efficiency and reduce environmental impact,” he said.
According to Anshul Singhal, Managing Director, Welspun One, the setting up of 100 infra nodes coupled with increased FDI will boost ‘Make in India’ resulting in leap in demand for industrial warehouses across locations.
“The town planning schemes, the National Corridor Development Program underway, and a strong focus on infrastructure development will catalyse the growth of the entire supply chain industry. The focus on industrial parks will help reduce challenges like land acquisition, financing gaps and restrictive regulations to help seize the potential of key upcoming markets,” he said.
Singhal also noted that the onus will be on private infrastructure companies to partner with government to set up enabling ecosystem.
Echoing similar views, Amrutesh Reddy, Director, NDR InvIT Managers said, “The Union Budget 2024-2025 presents a compelling landscape for the warehousing and InvIT sectors. We see significant potential in the government’s robust infrastructure allocation of Rs 11.11 lakh crore as announced in the Interim budget. The announcement of 12 new industrial parks and the focus on industrial corridors are set to boost demand for modern warehousing facilities.”
Hailing the government’s focus on developing the Eastern region, particularly through the establishment of industrial nodes in Gaya and Kolkata, Nitin Aggarwal, CEO, TVS Infrastructure Investment Manager, said, “This initiative, coupled with the enhancement of road connectivity projects, will significantly bolster the logistics network, driving efficiency and facilitating seamless operations in the Eastern regions. The government’s commitment to developing investment-ready plug-and-play industrial parks and simplifying FDI rules will further position warehouses as a prime investment asset class.”
