An investment comeback in the warehousing and logistics sector seems to spell good times for the steel industry, backed by certain measures undertaken by the present government, industry sources told ISMW.
The warehousing and logistics sector in India received a whopping investment of Rs 1,438 crore through two major deals in 2015. This made the overall foreign private equity (PE) inflow into the sector more than even the sum of five deals – Rs 1,350 crore – that took place in 2012.
The year 2013 had seen a remarkably low investment. However, government initiatives in making the policy environment conducive and strengthening of the e-commerce logistics platform post-2014, seems to have resulted in an investment comeback – as seen in 2015.
In fact, Nirav Kothary, National Director – Industrial Services, JLL India, said measures being undertaken by the government, are expected to lead to big bang growth in the Indian warehousing and logistics sector.
For instance, one is regulatory improvements. The government plans to improve the regulatory and taxation regime for a globally competitive environment. (This includes GST roll-out and single window clearance procedures).
Other measures include a thrust on manufacturing and connectivity push. Here, plans are afoot for developing a total of 66,117 km of roads, ie, building 30 km of road a day from 2016.
That apart in rail, heavy duty, high-speed, extra-wide, doubly stacked dedicated freight corridors (DFC) in western and eastern India are being developed.
Where seaports are concerned, there is a target capacity of over 3,130 mt by 2020 with over 50% anticipated to be generated at privatised non-major ports.
In airports, plans are on anvil to develop 200 low-cost airports in Tier II and Tier III towns.
All these measures mean increased used of steel.