So far this year, the sector has already seen an investment of $266 million.
Blackstone Group is looking to invest Rs 1,500 crore ($209 million) to build warehouses in India in partnership with the country's largest logistics provider in the private sector, Allcargo, reported Bloomberg.
As per sources in the report, talks are on with other investors as well. But as of now, the realty unit of the US-based asset management company might own a majority stake in the venture at 51 percent.
India has become an attractive location for warehousing business as e-commerce companies like Amazon and Walmart are spending billions to expand in the market. Ernst & Young LLP had predicted in its report that companies will invest $7.8 billion in warehouses in South Asian countries alone by the end of 2020. So far this year, the sector has already seen an investment of $266 million.
Easing this expansion in the storage spaces is the nationwide tax regime in the form of goods and service tax (GST). Retailers and especially e-retailers want to ensure fast delivery and want to invest in warehouses that directly impact their business.
EY also points out that apart from the emergence of an organized retail sector, warehousing in India is driven by increasing international trade with more private and foreign investments in infrastructure, growing manufacturing, and rising domestic consumption.The company plans to have 5 million square feet of warehouses across India by 2021 as part of its logistics division plan, pointed out the report.