India's Warehousing and Logistics to Get Major Advancements Under Union Budget 2023
With the government's proposal in the Union budget 2023-2024 focusing on infrastructure development and an all-time high capital expenditure in making India a globally connected economy, the warehousing and logistics sector is expected to receive a significant boost.
The FM stated in the budget announcement that infrastructure spending has increased by 33% to 10 lakh crore, accounting for 3.3% of GDP this year.
"We believe that the increase in Capex and resulting infrastructure development will also ease the development of warehousing and attract investment from the private sector, wishing to capitalise in this development," said Anshul Singhal, Managing Director, Welspun One Logistics Parks.
Capex investment of 4.5% of total GDP is expected to boost land prices and attract more investors, with demand for warehousing space likely to rise as consumption rises, particularly in Tier 2 and Tier 3 cities.
"There will be new demand for industrial and Warehousign space due to lowered tax rate of 15% for new companies starting manufacturing activities by March 31, 2024," Abhijit Verma MD Avinya industrial and logistic Park.
Furthermore, the Urban Infrastructure Development Fund, which will be established in Tier 2 and 3 cities, will increase demand for Grade A warehousing in this market.
The budget also aided in the transition to a cleaner energy source. By allocating Rs. 35,000 crore to the Ministry of Petroleum and Natural Gas to support the energy transition, the net zero goal, and energy security.
"Given that India is actively working toward achieving its net zero target by 2070, it will have a huge influence on the infrastructure and logistics sectors in India. The National Green Hydrogen Mission, which has a budget of 19,700 Crores, will make it easier to shift the economy into one that has low carbon intensity, reduce reliance on fossil fuel inputs, and establish the nation as the market and technological leader in this emerging industry," said Amrutesh Reddy, Managing Director, NDR Warehousing.