Logistics Boom: Demand for warehouse automation soar amid 'Make in India' boost

Upbeat economic growth and the government's focus on local manufacturing have boosted the demand for logistics in India, with a staggering 13.5 million square feet in January to March 2024 compared from 11 million square feet in the year-ago period, say a recent Savills India report.

The data revealed that leasing of industrial and warehousing spaces in Tier-I cities increased 25% to 10.5 million square feet during January-March 2024 from 8.4 million in the year-ago, while Tier II and III cities witnessed a 20% growth to 3 million square feet from 2.5 million square feet during the given period.

The inflated demand for logistics solutions in India coincided with the country's 16-year record high manufacturing activity at 59.1 PMI in March 2024, said a survey by S&P Global. The last time a reading of this level was recorded was in February 2008, when the HSBC India Manufacturing Purchasing Managers’ Index (PMI) had touched a high of 59.5.

The growing need for warehouses in India's Tier 2 and 3 cities to urbanization, economic expansion, the rise of e-commerce, organized retails, and government's initiatives like ‘Make in India’ that attracts businesses toward these regions due to lower cost, said Nirav Doshi, Founder and Managing Director of NIDO Group, an intralogistics mechanization and automation solutions provider.

NIDO aims to introduce two new models of unmanned goods movement system — AMRs and ASTRO — to enhance retrieval and fulfilment capabilities in Tier 2 and Tier 3 cities, he told us.

Automation technologies like IoT and AI enable efficient warehouses which drives further demand of logistics in India, said Doshi, adding that the company caters to automation needs with scalable systems for small businesses, focusing on affordability and support.

NIDO's founder Doshi said that they offer warehouse automation solutions like AS/RS for robotic storage, Conveyor Systems for inventory flow, Robotics and AGVs for order fulfilment, WMS for inventory management, and IoT Sensors for real-time monitoring.

For the last-mile delivery, the company's automated sorting systems empower warehouses to swiftly organize items for delivery, while barcode scanning technology facilitates seamless tracking throughout the supply chain, he said, adding that this expertise enhances speed, reliability, and cost-effectiveness in last-mile delivery operations and overall business growth. 

“By integrating robust automated solutions such as barcode scanning and RFID technology, we mitigate the pitfalls of manual data entry. Emphasizing last-mile delivery solutions, NIDO optimizes logistics, enhances supply chain efficiency, and ensures seamless operations, empowering businesses to thrive in today's competitive market landscape,” Doshi said. 

He further stated that NIDO Group extends its cost-efficient automation solutions across diverse sectors including pharmaceuticals, groceries, fashion, e-commerce, and 3PLs. 

In addition, artificial intelligence also revolutionized warehousing with advanced capabilities as it forecast demand, optimize inventory levels, and streamline resource planning which can reduce stockouts, he asserted.

“AI-driven automation enhances order fulfilment efficiency and accuracy. Customer service systems powered by AI offer real-time support. AI analytics provide insights for continuous operational improvement, adapting warehouses to changing demand patterns effectively,” Doshi said.

It is worth mentioning that India is positioning itself as a lucrative option for global companies to establish their additional production base outside of China, keeping in mind its low-labor costs and business-friendly policies.

Similarly, Nirav Doshi believes that India also has the potential to transition away from its reliance on China for warehouse automation solutions with more strategic investments and growing technologies.

“Government initiatives, support for domestic manufacturing, improved infrastructure, and upskilling the workforce in technologies can incentivize the creation of indigenous automation solutions, reducing dependence on Chinese imports,” he added.