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Nagpur: India’s zero-mile city to be among Asia’s top logistics hubs

Driven by India’s GST reforms, prominent retailers and logistics firms made early bets that, Nagpur, a quaint town of 2.4 million people at the nation’s geographic center would rally to become a booming logistics hub

Driven by India’s GST reforms, prominent retailers and logistics firms made early bets that, Nagpur, a quaint town of 2.4 million people at the nation’s geographic centre would rally to become a booming logistics hub. The self-fulling prophecy drew a groundswell of investments that now promise to transform the city best known for oranges, tiger sanctuaries and sweltering summers, into a multi-modal logistics giant. Given India’s momentous growth in the logistics sector, Nagpur stands to rank among Asia’s most crucial goods corridors.

In 2015, the global logistics market was valued at USD 8.1 trillion. Asia Pacific nations, led by China, India, Singapore, Indonesia, Japan, and Malaysia contributed to USD 3.8 trillion or 46.6% of this total (Transparency Market Research, 2016).

In tandem with the region’s momentum, Indian logistics is set to grow at a CAGR of 15-20%, at least twice the worldwide standard of 7.5%. Therefore, as a strategic gateway in Asia’s third largest economy, Nagpur will likely rise to contend with similar nerve centres like Tokyo, Hong Kong and Singapore.

Top 5 catalysts driving Nagpur’s transformation into a logistics nexus


The goods and services tax (GST), the greatest tax overhaul since India’s independence in 1947, will consolidate the nation’s 9 million businesses and 1 billion strong consumer base under one common market. Broadly the GST will subsume a heap of federal, state and local taxes to curb corruption and duplicate taxation. It will also streamline supply chains to reduce costs and increase productivity at an unprecedented scale.  As businesses optimize processes to deliver products to market faster and cheaper, competition will increase. Investors are therefore eager to corner first-mover advantage.

Nearly a decade ago, at nascent stages of the GST lifecycle, India sought to institute an export related special economic zone in Nagpur. The plan was thwarted by the global financial meltdown and set aside until GST rollouts renewed investment interests in the zero mile city.


A 2016 survey by PWC’s macro economics group suggests that trade volumes will significantly shift towards emerging markets by 2030. With attentive multi national logistics players waiting to bait developing nations, this era of double digit growth will attract more MNCs to nations like China and India than ever before.

As developed nations look out for fertile markets, emerging economies will look inwards.  Businesses in developing countries have a home grown advantage. India, with the world’s fastest growing population, has a domestic supply of skilled labour that doubles as a robust consumer base. Thus, companies need not compete on the international stage while their own country offers the heightened opportunities of an unsaturated market and exceptional growth rates. Initiatives like ‘Invest in India’, ‘Make in India’, ‘Look East’, and ‘Startup India’ echo an introverted business philosophy that leverages India’s native resources to elevate its rank among the world markets.

As Indian companies look to sharpen home-ground competencies, logistics hubs like Nagpur facilitating the country’s meteoric economy will benefit two-fold from increased foreign direct investment as well as domestic demand.


‘Digital India’ heavily underlines recent policy changes including the GST rollout. Automated processes are essential to organizing and innovating logistics. As an influx of investments in Nagpur drums up mega manufacturing plants and mammoth warehouses, technology steps in to optimize operations and ensure sustainable scalability. Recently announced upgrades like FASTags (electronic toll booth payments), E-way bills (digital freight tracking), Aadhar pay (enabling digital payments through Aadhar cards for those who do not have debit/credit cards), railway e-tenders (digitized railway supply chains), cyber security measures and tax breaks for digital points of sale both expedite and encourage daily transactions.

Some Indian logistics players are already allocating an artificial intelligence budget to develop robots capable of taking over mundane jobs at warehouses. Self-driving trucks, already operative in some parts of the world, nudge closer to Indian highways. They would most likely debut as semi-autonomous vehicles travelling short distances, for instance from major highways to strategically proximate warehouses, thus eliminating one segment of human operated transport.

The human-tech dynamic is increasingly symbiotic. As we progress is creating technology to meet our needs, we are also exposed to its unforeseen potential to solve problems we have not yet encountered. Therefore, a digital network, that facilitates evolving processes in a fast-growing economy, will also secure greater returns on investments and facilitate more viable opportunities for invention and progress.


The CEO of Nagpur operations for Distribution Logistics Infrastructure Ltd (DLI) confesses that it is often cheaper to move goods to China than it is to move them within India. The ongoing Bharatmala project will, therefore, develop 27,000 km of highways to link ports with logistics hubs and optimize freight movements. Forty-four highways or ‘economic corridors’ will carry 80% of the nation’s cargo. One such corridor will be a 710 km four lane super fast expressway connecting India’s financial capital, Mumbai to Nagpur.

Indian rail networks, the second largest in the world, stretch 66,000 kms around the country but the overcrowded lines force most trains to travel at a meagre 24 kmph on average, prolonging the trip from Mumbai to Nagpur from 18 hours to 72 hours. In late 2015, PM Modi and Japanese counter part Shinzo Abe signed an agreement to jointly facilitate India’s first bullet train route from Mumbai to Ahmedabad. The INR 80,000 crore or USD 12.4 billion project would commission hi-tech train technology from Japanese contractors while granting 60% of the project slice, including laying rail or building bridges and embankments, to Indian companies like Tata Projects, L&T and IRCON.

Considering that several of these renovated rails and roadways will lead to India’s upcoming logistics hub, infrastructural projects are rife within Nagpur as well. Construction is underway on a USD 1.3 billion metro line spanning about 30 kms to connect the city’s fast developing zones. According to Bloomberg, “a joint venture water project by Vishvaraj Infrastructure Ltd. and Veolia Water SA of France would make Nagpur the first city in India to provide all residents, even slum-dwellers, with a continuous supply of clean water.


Nagpur is home to Hindu nationalist group, Rashtriya Swayamsevak Sangh (RSS) which ideologically underpins PM Modi’s own ruling Bharatiya Janata Party. Nagpur’s native MP and the nation’s Transport and Shipping Minister, Nitin Gadkari is a powerful proponent of the city’s imminent metamorphosis.

The combined advantage of its geographic location and political clout combined with broader regulatory advances, infrastructural development and digitization give Nagpur an unparalleled strategic sanction. The city’s small-town nature is also profitable. A developed city may have proved more stringent to navigate in the face a sudden investment surge. With Nagpur’s quaint landscape and small population, investors and government bodies have the opportunity to molecularly shape the city through tactical infrastructural frameworks and urban design into a cohesive and progressive logistics network.

Major Investments in Nagpur:

  • Future Group, a USD 20 billion conglomerate with significant retail and FMCG holdings set up a warehouse the size of 7 football fields with a conveyor belt running 2.5 km in 2012. They have announced plans to set up another distribution centre spanning 67,000 sq meters (about 20% larger than one football field). They aim to nearly double production capacity to 700,000 pieces of apparel a day and use the Nagpur facility to supply all 250 Big Bazaar stores operated by the Group.
  • Minister Nitin Gadkari announced plans to expand Nagpur’s airport by 4,000 football fields to establish an international cargo hub that would employ a staff of 50,000 people, which is roughly five times the status quo.
  • DLI, a unit of London-listed Infrastructure India Plc has just opened a 30-hectare storage park on the outskirts of the city, the facility traffics trains and trucks through dedicated routes to and from its storage units.
  • To further capitalize on the Mumbai-Nagpur expressway, there are plans to set up a 2,312 hectare ‘five-star’ industrial estate adjacent to the road.
  • Expecting an abrupt rise in population of around 12 million people, urban developers plan to invest INR 400 crore or USD 62 million in ‘Empire City‘, an integrated township featuring a five-star hotel, shopping mall, multiplexes and 600 luxury apartments.

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