As demand for warehouse facilities in the country continues to rise, there is a growing trend towards automation in the infrastructure sector, driven by the need to improve efficiency and reduce logistics costs. A report by business consultancy Alvarez & Marsal reveals that by 2030, more than 80% of Indian warehouses are expected to have some level of automation. This shift is especially evident in Class A warehouses, which are expected to expand at a compound annual growth rate of 12.5% and reach approximately 324 million square feet. foot by 2027-2028.

Class A warehouses represent an advanced infrastructure equipped with high-quality storage, assembly and distribution facilities. The surge in e-commerce, characterized by increased consumer demand for fast deliveries and rising land prices, underlines the need for warehouse automation. The report categorizes automation maturity on a scale from level 0 (manual operations) to level 4 (end-to-end automation). Currently, most warehouses in India fall within tiers 0 to 2, indicating varying degrees of automation implementation.

However, the adoption of automation in the Indian warehouse sector comes with challenges. India's labor-intensive market requires time and investment in developing a robust automation ecosystem, including local service providers, cost-effective technology tools, competitive differentiation, and ongoing maintenance and technical support. The financial viability of certain automation technologies is also limited by the existing size of warehouses in India. Additionally, long payback periods for automation solutions clash with the shorter lease terms typically offered by third-party logistics providers, creating financial obstacles for potential users.

The move towards automation is in line with the objectives of the National Logistics Policy, which aims to reduce the country's logistics costs from 13 to 14% of GDP to single digits. Ultimately, integrating automation into the warehouse industry is a crucial step toward improving efficiency and meeting the changing demands of the modern marketplace.