Manu Raj Bhalla says that there is a great opportunity for reducing the number of permissions required to establish and operate warehouses
Emphasising that while government policy reforms have improved ease of doing business, Manu Raj Bhalla, president of the Warehousing Association of India, stated that there is still scope to simplify procedures and reduce the number of approvals required to set up and operate warehouses.
In an interview with BW Retail World on the sidelines of the India Warehousing Show, Bhalla highlighted that while urban fulfilment centres are a need, however it is quite disorganised currently because we do not have dedicated areas in the urban cities marked for logistics. Edited Excerpts:
What are the segments and factors driving the growth of the Indian warehousing sector as a whole?
There are a couple of things, one is, of course, the business need, manufacturing is growing in India, and India is becoming very important in global supply chains, and therefore, warehousing is critical to any supply chain. The government has made a lot of policy changes, reform to help the ease of doing business for warehousing and a lot more needs to be done but at least they have started doing that and more and more investors are coming to India from overseas as well as Indian investors are investing in the warehousing industry because we can see a bright future for this area.
As WAI president, what is that one request that you want to put before the government when it comes to supporting the industry?
Our biggest ask is again to enable the industry. We need to reduce the number of permissions that are required to establish a warehouse, at present, there are about 60 odd permissions, many of them at the state level and some of them at the central level. I think there is a great opportunity for simplifying the processes and the number of such permissions that are required to establish and operate warehouses.
The rise of urban fulfilment centres is becoming a trend. Do you think this is the future for logistics and warehousing?
Urban fulfilment centres, it is a need, however right now it is quite disorganised because we do not have dedicated areas in the urban cities marked for logistics and therefore there is a need and from warehousing association also we are working with some of the state governments where we have submitted the urban logistics policy taking into account the business needs as well as safety, security, sustainability of warehouses which are in-city warehouses.
How are technological advancements and Artificial Intelligence (AI) improving efficiency when it comes to logistics and warehousing?
AI is definitely helping. It will continue to evolve because some of the larger warehouses have adopted artificial intelligence. Some of the older warehouses are yet to adopt technology, and I think it will happen soon, but I think the centre of this is the ecommerce and quick commerce, which is demanding the use of AI, blockchain, advanced planning and integrated supply chain management through technology. So, I think this is helping us optimise the productivity, improve operations, improve accuracy in inventory management and so on.
What is that one key challenge hampering the growth of the warehousing industry?
Warehousing is basically highly dependent on land, so land in India is a state subject and each state has its own policy related to warehousing, land allocation, etc. So, I think that is one of the challenges that the land regulation and the change of land use, from agriculture or for warehousing, need to be made very simple as an easy process, so that we can unlock the unutilised resources.
How can the logistics cost be reduced, and what are the areas that can be improved in this particular aspect?
The logistics cost of India is a matter of great discussion and as per the National Council of Applied Economic Research (NCAER) report which was last published, India’s logistic cost is already below 10 per cent, so yes there is an opportunity for further improvement and it will be a combination of many things, one is the infrastructure, multimodal logistics infrastructure as well as automation, technology and digitalisation of supply chains.
