India’s industrial and warehousing sector about to change

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Employees sort packages in a warehouse at a distribution center in New Delhi, India. Reuters

V Nagarajan

COVID-19 has had a domino effect on economies around the world. Over-reliance on a single source of supply has led countries to review their supply chains. In addition, with a view to diversifying the supply chain, several markets, including India, appear as a place of catapult for the establishment of new production lines. The crisis has translated into opportunities and created significant changes in India’s industrial and warehousing sector.

India emerges as an auxiliary to shear the current dependence on a single source, thus providing an appropriate opportunity for manufacturing units to serve export-oriented markets, while enjoying the advantages of its geographical location and its domestic market. with a broad consumer base, according to experts at Conclave JLL and CII Realty and Infrastructure.

Additionally, over the past two years, to foster growth and address gaps in the manufacturing ecosystem, the Indian government has stepped up efforts by lowering the corporate tax rate for new manufacturing units and announcing a Spending $ 26.9 billion under the Production Incentive Program (PLI). India has positioned itself as the most competitive tax structure with the lowest rate with a base tax rate of 15% (effective tax rate of 17.16%) among the MITI-V countries (Malaysia, Indonesia, Thailand, India and Vietnam).

These initiatives helped India attract the highest manufacturing investment projects among MITI-V countries, as 64 projects and investments totaling $ 16.63 billion between January 2020 and July 2021 poured in from the the world, with important interests from China, France, Germany and Japan. , Netherlands, South Korea, Taiwan, United Kingdom and United States.

Atmanirbhar Bharat also fueled the manufacturing of domestic enterprises. As a result, domestic Indian companies have also shown confidence in evolving manufacturing sectors, contributing more than $ 60 billion in significant investments over the past 18 months.

The paradigm shift in consumer behavior from offline shopping to online shopping has led to increased activity in e-commerce and 3PL / logistics. Coupled with the rise of e-commerce and 3PL / logistics, the resumption of growth in the manufacturing industry has also given a boost to demand for quality warehouse space Technology implies a formula for neutralizing challenges and boost the efficiency of any system, including logistics and warehousing operations. Manufacturers are using technology in their supply chains. With the advent of modern technology and constantly evolving sophisticated tools, the terms “logistics” and “warehouse” are being rediscovered and redefined.

The logistics industry is now undergoing a more robust metamorphosis than at any time in history. Global supply chains, urbanization, e-commerce, technology, sustainability, etc. are some of the factors that push logistics to expand its borders to reinvent operational efficiency.

The industrial and warehousing sector in India offers many opportunities for developers, occupants and investors.

The shift in consumer behavior from offline to online shopping has paved the way for a sharper focus on new warehousing spaces by e-commerce players and 3PL players. In addition, Indian government policies and initiatives have put a damper on the manufacturing sector, which in turn stimulates demand for warehouse space.

In addition, advanced technologies are used in all stages of the industry, increasing efficiency and opening up new ways of doing business. For developers and occupants, sustainability measures offer long-term economic benefits, while for investors, this is an exciting and growing opportunity.

I plan to return to India to develop my business activities. Can I keep my foreign assets including real estate outside India after my return? Please clarify. Ashish Singhvi, Sharjah.

In accordance with FEMA Section 6 (4), a person residing in India may own, possess, transfer or invest in foreign currency, foreign securities or any real estate located outside India, if he has was acquired while residing outside India or was inherited. You can use these assets abroad freely.

I have residential and commercial properties jointly invested with my wife. We intend to sell two and fully reinvest the proceeds in a larger house. Can we avoid long-term capital gains tax because we invest all of the proceeds from the sale? Adam Krapish, Dubai.

Yes. You can take advantage of the deduction option available under section 54 if each of you reinvests the amount of capital gains resulting from the sale of real estate to purchase a larger unit.

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