As GST is implemented now, which cities in India would emerge as new logistics hubs?
GST rollout would increase investment in big box warehouses and companies would gradually shift to hub and spoke model while reducing the number of stocking points. Delhi NCR, Mumbai and Bangalore would continue to grow as logistics hubs due to their proximity to consumption centres and good infrastructure.
In our opinion, we would see emergence of below cities as logistics Hubs.
Pune, Chennai and Ahmedabad are not only important consumption centres but are also major manufacturing hubs. Manufacturing would be driving logistics demand in these cities. With lesser stocking points, these manufacturing hubs would see rise of bigger and more automated warehouses.
Due to its strategic location, real estate companies as well as 3PLs are betting high on Nagpur. Nagpur also has good infrastructure and multi modal connectivity which are pre requisite for development of any logistics park. Madhya Pradesh is also located centrally and has very good connectivity by road and rail. Infrastructural challenges have not allowed Madhya Pradesh to fully capitalize on its location advantage. Government’s recent focus to develop Pawarkheda as a logistics hub and developing require infrastructure for the same could be an important step in positioning Madhya Pradesh as a preferred state for logistics