Economy & Market

On the Path of Transformation

Published

9 years ago

January 12, 2018

admin

The logistics sector is fundamental to the development of a country. Logistics is a sector where the trend is determined by the country’s overall economic performance.

Logistics including transportation, inventory management, warehousing, materials handling and packaging, and integration of information, is related to management of flow of goods between the point of origin and the point of consumption. With the growing Indian economy and changing business perspectives, the scope of the logistics industry has broadened from rudimentary transportation of goods to include end-to-end supply chain solutions including warehousing and express delivery.

The Indian logistics industry was estimated to be approximately $160 billion in FY17. The key segments include road, rail, coastal, warehousing, cold chain and container freight stations and inland container depots (CFS/ICD). The domestic logistics market is expected to grow at a CAGR of approximately 10 per cent. Indian logistics market is expected to be driven by the growth in the manufacturing, retail, FMCG and e-commerce sectors.

Development of logistics-related infrastructure such as dedicated freight corridors, logistics parks, free trade warehousing zones, and container freight stations are expected to improve efficiency. The industry is dominated by transportation, which accounts for over 85 per cent of total value, and its share is expected to remain high over the next few years. The sector provides employment to more than 22 million people. Improving logistics sector has significant bearing on exports and media sources estimate that a 10 per cent decrease in indirect logistics cost could potentially increase 5 to 8 per cent of exports.

Of the various modes of transportation, roads and railway are the most preferred mode accounting for approximately 60 per cent and 30 per cent of the total cargo volumes handled, respectively. The share of other transportation modes comprising Inland shipping, pipelines and airways remains minimal accounting for the balance 10 per cent. The higher transportation costs in India can be associated with poor road infrastructure leading to lowering of the maximum distance that can be covered by any commercial vehicle, old vehicles fleet and higher cess and toll on the highways while the higher warehousing costs are on account of shortage of warehousing capacity in India, non-standardisation of warehouses in terms of IT application, etc.

As per the Ministry of Road Transport and Highways, India’s logistics cost as a per cent of GDP stood at 13-14 per cent compared to 10- 11 per cent for BRIC countries and 8-9 per cent for developed countries. The US spends 9.5 per cent and Germany 8 per cent of their GDP on logistics costs. A significant proportion of the higher cost can be attributed to the absence of an efficient intermodal and multimodal transport systems. Going forward, the logistics cost as a per cent of GDP for India is expected to decline driven by initiatives such as implementation of GST, investments towards road infrastructure, development of inland waterways and coastal shipping, thrust towards dedicated freight corridors, etc.

Currently the Indian logistics industry is highly fragmented and unorganised. Owing to the presence of numerous unorganised players in the industry, it remains fragmented with the organised players accounting for approximately 10 per cent of the total market share. With the consumer base of the sector encompassing a wide range of industries including retail, automobile, telecom, heavy industries, etc., logistics industry has been increasingly attracting investments in the last decade.

The sector is facing challenges such as under-developed material handling infrastructure, fragmented warehousing, multiple regulatory/policymaking bodies, lack of seamless movement of goods across modes, minimal integrated IT infrastructure. In order to develop this sector focus on new technology, improved investment, skilling, removing bottlenecks, improving intermodal transportation, automation, single-window system for giving clearances, and simplifying processes would be required.

Global scenario
Warehousing primarily refers to the storage of goods to be transported, whether inbound or outbound. The warehousing industry includes establishments operating warehousing and storage facilities for general merchandise, refrigerated goods and other warehouse products. Warehouses are one of the major segments of the rapidly growing logistics industry. Currently the segment has evolved from providing not only custody for goods but also offering value added services such as sorting, packing, blending and processing. With evolution of an organised retail sector modern warehouses for the storage of perishable goods have become indispensable In 2017, the global warehousing and storage market was estimated to be around $475 billion. The global warehousing and storage accounted for approximately 8 per cent of the overall logistics market in 2017. The warehousing and storage market was the fifth largest market in the global logistics market in 2017. North America is the largest geographic region accounting for nearly 28 per cent of the global market.

Globally, warehousing has moved ahead from single storey to multi-story warehouses in densely populated cities and expensive land spaces. A multi-story warehouse consists of more than one floor and is designed to increase the available floor space. It results in better land utilisation rate and enhances operational efficiency. Multi-story warehouses have been successful in densely populated cities predominantly in Asian countries such as China, Japan, Hong Kong and Singapore, due to high land and construction costs, small site areas and limited industrial land availability.

Domestic scenario
The warehousing market in India is highly fragmented with most warehouses having an area of less than 10,000 sq.ft. Approximately 90 per cent of the warehousing space in the country is controlled by unorganised players with smaller sized warehouses which have limited mechanisation. Fragmented warehousing footprint results in higher average inventory holding, in addition to resulting in higher storage and handling losses, driven by lower level of mechanisation.

Warehouses have become one of the major segments of the rapidly growing Indian logistics industry. Today they do not only provide custody for goods but also offer value added services such as sorting, packing, blending and processing. With evolution of an organised retail sector modern warehouses for the storage of perishable goods have become essential. The government’s initiatives to promote the growth of warehouses in the country through measures such as enactment of the Warehousing Act, 2007, investments in the establishment of logistic parks and Free trade warehouse zones (FTWZs) together with the introduction of Goods & Service Tax (GST) regime augurs well for the industry’s growth. Sensing the tremendous growth potential of the warehouse sector, the private players (including both domestic and international) have ventured with a view to bridge the gap between cost and efficiency of operations.

Nearly 60 per cent of the modern warehousing capacity in India is concentrated in the top six cities namely Ahmedabad, Bangalore, Chennai, Mumbai, NCR and Pune, with Hyderabad and Kolkata being the other major markets. This is driven by concentration of industrial activity and presence of sizeable urban population around these clusters. Going forward, due to factors like quality of infrastructure and availability of labour, these advantages are likely to remain with these cities. In all the segments of warehousing industry barring the agricultural segment, the majority of the capacity is controlled by the private sector. In the agricultural segment, approximately three-fourth is controlled by different government entities. The primary objective of a majority of these warehouses is to only store food grains and ensure food security.

Types of warehouses
Traditionally, warehouses were broadly classified into public-private, bonded, government and co-operative warehouses. Lately, cold chains, container freight stations (CFS) and inland container depots (ICD) are gaining importance.

Private warehouses: These warehouses are owned by private entities or individuals and are used exclusively for the goods owned, imported by or on behalf of the licensee. The warehouses are usually constructed at strategic locations to cater various manufacturing, business and service units. They are flexible enough to be customised in terms of storage and placement, according to the nature of the products.

Public warehouses: These Warehouses are licensed by the government to private entities, individual or cooperative societies to store goods of the general public. They are rented out against a fee and usually set up at transportation points of railways, highways and waterways, providing the facilities of receipt, dispatch, loading and unloading of goods. The government also regulates the functions and operations of these warehouses used mostly by manufacturers, wholesalers, exporters, importers, government agencies, etc.

Bonded warehouses: These warehouses are licenced by the Government to accept imported goods for storage until the payment of customs duty. They are located near the ports. They are either operated by the Government or work under the control of customs authorities. The warehouse is required to give an undertaking or "Bond" that it will not allow the goods to be removed without the consent of the custom authorities. The goods are held in bond and cannot be withdrawn without paying the customs duty. Such warehouses are very helpful to importers and exporters. If an importer is unable to pay customs duty immediately after the arrival of goods he can store the goods in a bonded warehouse. He can withdraw the goods in instalments by paying the customs duty proportionately. Goods lying in a bonded warehouse can be packaged, graded and branded for the purpose of sale.

Container freight stations (CFS)/inland container depots (ICDs): CFSs/ICDs are custom-bonded facility with public authority status for the handling and storage for containers. These depots equipped with warehousing space, adequate handling equipment and IT infrastructure.

Cold storage: A cold storage is a temperature controlled storage space catering mainly to agriculture and food industries. Cold stores are used for the storage and distribution of perishable goods such as fruits and vegetables, dairy products; frozen foods such as meat and ice cream, and temperature-sensitive pharmaceutical products. Given that India is primarily an agriculture country, cold storage has huge potential in India.

Government storage: The primary objectives of any government storage are 1) to ensure food security, and 2) enable trade movement both within and out of the country. Consequently, the Central Warehousing Corporation operates 431 warehouses (storage capacity of 100.28 lakh MT) including 44 custom bonded warehouses, 29 CFSs/ICDs, 3 air cargo complexes (ACCs) (5,961 MT) and 3 cold storage warehouses (2,419 MT). Further, various State Warehousing Corporations (SWC) manage a total capacity of 283.34 MT across 1,831 warehouses. The Food Corporation of India (FCI) works for holding agricultural produce to meet the requirements of various government schemes. FCI has its own storage capacity but also hires capacities from CWC, SWCs and the private sector.

Cold storage: There are over 7,700 cold storage warehouses with a capacity of over 36 million MT in India with a significant portion of the facilities being privately owned. India’s cold storage capacity is unorganised and dominated by traditional cold storage facilities. The distribution of cold storages is highly uneven with majority of the cold storages located in Uttar Pradesh, Gujarat, Punjab and Maharashtra. Further nearly two thirds of the total cold storage capacity is used for horticulture crops including potato. Despite the storage capacity, the Central Institute of Post-Harvest Engineering and Technology estimates that close to 15 per cent-16 per cent of fruits and vegetables perish as cold storages are located near consumption centres rather than farms. The cold storage segment is driven by growth in trading of perishable products both agricultural and others (e.g. pharmaceutical).

Regulations
WDRA rules: Warehouses (especially agricultural) in India are regulated and governed under The Warehousing (Regulatory and Development) Act, 2007. The main objective of this Act is to develop and regulate warehouses, negotiability of warehouse receipts, establishment of Warehousing Development and Regulatory Authority (WRDA) and for related matters.

Registration: The act makes it compulsory for a person to carry on warehousing business as a business and issue a negotiable receipt to obtain a certificate of registration.

Warehousing receipt: The warehouse would issue receipts only after ascertaining quantity, quality / grade and other particulars as may be mentioned in the receipts.

Authority and Powers under the Act: Some of the authorities and powers conferred under the Act are granting registration and cancellation/renewal of registration, specifying qualification of warehouseman, and regulating rates, advantages, terms and conditions that may be offered by warehouseman in respect of warehousing business.

Offenses under the Act: Failing to ascertain quality and quantity, failing to surrender negotiable receipt by depositor or endorsee and payment of all his lawful charges and cancellation of encumbrances endorsed on the receipt to deliver the goods represented by the receipt are some of the offences under the act.

Penalties: The offences committed under this Act shall be punishable with imprisonment of a term of up to three years or with fine of Rs 1,00,000 or both.

The industry also remains governed by various acts such as: Multimodal Transportation of Goods Act, 1993, Foreign Trade (Development and Regulation) Act, 1992, Customs Act, 1962, Carriage of goods law etc. regulating the movement of goods and allied services. Various policy changes have impacted the warehousing sector in India. These include the introduction of the Goods and Service Tax (GST), National Policy on Handling, Storage and Transportation, and increasing Public-Private Partnerships (PPP). Following are a few such policy measures:

GST: GST has consolidated the tax regime across states which will result in cost and time efficiencies across the supply chain. GST will also hasten the consolidation of warehouses thus accentuating the formalisation of the largely unorganised warehousing sector. For most logistics services like e-commerce logistics, warehousing and air freight (export), the tax rate is 18 per cent, which is an increase from the earlier rate of 15 per cent which includes service tax and cess. Services like ocean freight and road transportation are in the 5 per cent slab. Under GST, the tax on warehouse, storage and other labour services has increased from 15 per cent to 18 per cent.

Logistics Parks Policy: Launch of multi-modal logistics parks and the grant of "industry" status to the logistics sector.

Domestic manufacturing emphasis: The focus on "Make in India" is expected to increase domestic manufacturing and increase the requirement for associated activities such as warehousing.
Agri-warehousing activity covered under Priority Sector Lending by RBI Subsidy schemes such as 1) Grameen Bhandaran Yojana – a capital investment subsidy scheme offered by the NABARD, which ranges from 15 per cent to 33 per cent of project cost, depending on the location and operator, 2) National Agricultural Renewal Fund. Govt. of India – encourage private investment in the creation of agriculture infrastructure
Tax incentives such as 1) Tax relief under 80(I)(B): tax holiday on warehousing income, 2) Investment-linked deduction under Section 35AD: 100 per cent upfront depreciation for tax purposes
The government permits 100 per cent FDI under the automatic route for all logistics services except courier and air transportation services. In case of courier services, 100 per cent FDI is permitted subject to the approval of the Foreign Investment Promotion Board (FIPB) while FDI up to 74 per cent is permitted under the automatic route for air transport services including air cargo services. Further according to media reports, the government is working on a policy to create new logistics hubs by preparing an integrated logistics plan. The new integrated logistics plan would be prepared by the logistics division in the department of commerce in consultation with various stakeholders.

Trends
Warehouse consolidation due to GST: With the advent of GST and the consequent redrawing of supply chains, there will be significant consolidation of warehouses by companies in the consumption space. A bigger warehouse in an appropriate location would be able to better serve a larger area. This will lead to development of large modern technology based warehousing operations and rapid modernisation of unorganised godowns. Smaller local developers and property owners are expected to exit the space by selling out to the large institutional developers in existing clusters.

Reduction in inventory holding costs: Further the combining of smaller warehouses into a single larger one is also expected to reduce the inventory level requirements which are expected to positively impact the companies as inventory carrying cost is a significant share of costs.

Smart warehouses: With the increase in the warehousing and storage market there has been a concurrent increase in technology usage especially in the grade A/B warehouses. These warehouses use internet of things (IOT) to track a product in the warehouse and also helps in increasing efficiency and speed across supply chains. Variety of devices such as wearables, sensors and radio frequency identification tags are used to locate the products in the warehouse. This reduces the time to deliver the product to the customer and increases accuracy.

Rise of Direct Port Delivery (DPD): DPD involves the delivery of a shipment directly from a port to the consignee instead of initially holding it at a CFS (Container Freight Station). The DPD initiative under "Ease of Doing Business" has witnessed steady growth in terms of proportion of total containers handled. At JNPT, the share of Direct Port Delivery (DPD) has increased from 5.4 per cent in April 2016 to 39.2 per cent March 2018. This is likely to have an impact on the CFS. However, shortage of space at warehouses poses a challenge to service DPD clients efficiently.

High tonnage trucks sales are expected to rise: Supply chain realignment and check post discontinuation has led to a reduction in the travel time as well as fuel costs. This has led to a demand for larger more efficient trucks as warehouses are consolidating and larger loads are required at lower number of locations. Despite the higher upfront costs, such trucks are expected to reduce overall shipment costs by carrying a larger load per trip.

Negotiable warehouse receipts
Negotiable Warehouse Receipts (NWR) issued by registered warehouses enables farmers to seek loans from banks against NWRs and enables them to extend the sales period of modestly perishable products beyond the harvesting season. Consequently, NWRs can avoid distress sale of agricultural produce by the farmers in the peak marketing season. However, NWRs have not witnessed substantial growth due to 1) low levels of registered warehouses with WDRA, 2) minimal concession from banks for loans against NWRs, 3) presence of other collateral based lending entities, which do not require registration under WDRA.

Demand drivers for logistics
Emergence of MNCs and organised retail: One of the key demand drivers for the logistics industry has been emergence of MNCs and the share of organised retail has been increasing over the years. Most of the global MNCs prefer low cost manufacturing locations connecting the consuming market at the lowest possible cost and through highly efficient supply chain.

Emergence of 3PL and 4PL: Third party logistics or 3PL is a concept where a single logistics service provider manages the entire logistics function for a company. While the Indian 3PL market is still very much in its infancy compared with other countries, it is experiencing healthy growth and attracting new companies eager to capitalise on the plentiful opportunities it offers, In fourth party logistics 4PL, logistics is controlled by a service provider that does not own the assets to carry out logistics activities but outsources to subcontractors, the 3PL. 4PLs facilitate single-point reference for all logistics needs, possess knowledge of logistics to obtain most efficient and effective solutions, have manpower resources of higher quality to supervise vendors and ensure continuous process improvements and, above, all an IT base to network customer systems.

Robust trade growth: Post liberalisation there has been significant increase in economic growth which has led to an improvement in the domestic and international trade volumes. Consequently the requirement for transportation, handling and warehousing is growing at a robust pace and is driving the demand for integrated logistics solutions.

Globalisation of manufacturing systems: IT plays a key role in transportation and logistics industry. Today technology is present in all the areas for a logistics service provider. Technology helps organised logistics companies score over the unorganised ones, and will be key to their operations going ahead given the competition

Increasing investment in logistics parks: The concept of Logistics Park has gained attention from both public as well as private players. A large number of special economic zones have also necessitated the development of logistics centre for the domestic market as well as for trade purposes

Growth in the organised retail and the food processing sector is driving growth in the cold chain storage segment in India.

Challenges
Lower Standardisation: India’s logistics industry has been adversely affected by the lower standardisation of cargo and containerisation of logistics traffic, hampering the overall speed and thus increasing cost of storage and movement.
Need for large capital and issues related to land acquisition have also tempered the growth of the sector. However, with expected increase in investment by international players, the gap in funding requirement is expected to be addressed in the near future.
The industry revenue has grown at a modest CAGR of 2.5 per cent over the FY12 – FY17 period. Concurrently, the annual revenue growth rate has varied significantly over the same period. The companies generate the largest share of their revenues from rental i.e. storage charges; other sources of earnings include income from value added services such as such as sorting, packing, blending and processing. On the other hand, the key heads of expenses include employee costs, depreciation, SG&A costs, power & fuel costs and interest costs. Over the FY12-FY17 period, EBITDA margin has moved down as well as up ranging from a low of 7.2 per cent in FY14 to a high of 11 per cent in FY16 and declining to 10.1 per cent, while PAT margin has generally remained at around 2.5 per cent-4 per cent.

Although the debt levels of the companies have trended upwards, the debt to equity has generally remained stable, on the other hand, the interest coverage having peaked in FY15, has trended marginally downwards in the next two years. The decline in credit quality in the transportation and storage sector is on account of delays in debt servicing, liquidity constraints, decline in profitability and deterioration in the capital structure.

Outlook
CARE Ratings estimates that the warehousing industry will grow at a rate of 13-15 per cent in the medium term driven by the growth in manufacturing, retail, FMCG and ecommerce sector. Growth in overall production and consumption, organised retail, logistics outsourcing, and regulatory interventions such as WRDA Act and GST, private investments in logistics and other infrastructure developments such as Dedicated Freight Corridor (DFC) have also improved prospects of the organised professional warehousing segment. Further the implementation of GST is eliminating inefficiencies arising out of the erstwhile complex tax structure as well as interstate taxes.

Additionally, the government’s decision to allow FDI in retailing with emphasis on backend infrastructure such as modern warehousing space is also expected to provide further impetus to the sector.

Industrial warehousing is expected to grow due to various factors including the anticipated increase in global demand, growth in organised retail and increasing manufacturing activities, expansion of e-commerce options and growth in international trade. This segment is expected to witness significant activity as the presence of the unorganised segment which is dominant in the segment is also expected to significantly reduce and the companies would also be rationalising and consolidating their space requirements based on time to serve the market and not taxation.

Demand for agriculture warehousing is expected to grow moderately on account of high base and expected normal monsoons.

Integrated models, diversification across end-user industries are expected to drive growth of cold chain segment. Significant demand is also seen coming from storage of fruits and vegetables, and pharmaceutical segments.

The container freight station (CFS)/ inland container depot (ICD) industry although on a growth curve is expected to be under pressure due to the growth of Direct Port Delivery (DPD) and profitability is expected to be hampered with the anticipated loss of volumes and consequential lower utilisation.

However, the overall growth potential is limited by several key challenges like limitations in infrastructure connectivity, need for large capital and issues related to land acquisition which would need to be addressed for ensuring sustainable growth.

Source: CARE Ratings’ Industry Research on Overview of the India Warehousing Industry

India’s first multi-modal terminal on inland waterways! Prime Minister Narendra Modi inaugurated India’s first multi-modal terminal on the Ganga river in his parliamentary constituency and received the country’s first container cargo transported on inland waterways from Kolkata.

This is the first of the four multi-modal terminals being constructed on the National Waterway-1 (River Ganga) as part of the World Bank-aided "Jal Marg Vikas Project" of the Inland Waterways Authority of India. The total estimated cost of the project is Rs 5,369.18 crore, which will be equally shared between the Government of India and the World Bank. Its objective is to promote inland waterways as a cheap and an environment-friendly means of transportation, especially for cargo movement. The Inland Waterways Authority of India (IWAI) is the project implementing agency. The project entails construction of three multi-modal terminals (Varanasi, Sahibganj and Haldia), two inter-modal terminals, five roll-on-roll-off (Ro-Ro) terminal pairs, new navigation lock at Farakka, West Bengal, assured depth dredging, integrated vessel repair and maintenance facility, differential global positioning system (DGPS), river information system (RIS) and river training.

Disclaimer:
This report is prepared by CARE Ratings Ltd. CARE Ratings has taken utmost care to ensure accuracy and objectivity while developing this report based on information available in public domain. However, neither the accuracy nor completeness of information contained in this report is guaranteed. CARE Ratings is not responsible for any errors or omissions in analysis/inferences/views or for results obtained from the use of information contained in this report and especially states that CARE Ratings has no financial liability whatsoever to the user of this report.

Economy & Market

The Road Ahead Begins Here

Published

1 week ago

August 11, 2026

admin

The future of India’s roads took centrestage at RAHSTA Expo 2026, where policymakers, contractors and industry leaders came together under one roof. The event blended thought leadership, technology showcase and industry recognition into a single powerful platform.

India’s roads and highways community gathered in full strength at the Jio World Convention Centre, Mumbai, for the 16th edition of the RAHSTA Expo (Roads and Highways Sustainable Technologies & Advancement). Over two action-packed days, the event brought together policymakers, contractors, consultants, developers, equipment manufacturers, material suppliers, technology providers and investors to deliberate on the future of India’s ,infrastructure while showcasing the latest innovations driving the sector.

The event culminated in the prestigious RAHSTA Awards, where Shri. Ajay Tamta, Union Minister of State for Road Transport & Highways, felicitated organisations and professionals for their outstanding contributions to road construction, engineering, safety, sustainability and technology. With leading contractors, senior government officials, industry veterans and technology providers under one roof, the event reaffirmed RAHSTA’s position as one of India’s most influential platforms for the roads, highways, bridges and tunnels ecosystem.

Organised by FIRST Construction Council in association with ASAPP Info Global Group, RAHSTA has steadily evolved beyond an exhibition into a platform where policy, technology, engineering and business converge to address the opportunities and challenges shaping India’s next generation of transport infrastructure.

Beyond expansion, towards value

The conference opened with a thought-provoking address by Pratap Padode, Founder and Editor-in-Chief, Construction World, who observed that India’s highways sector has reached an important inflection point. Introducing this year’s theme – ‘From Expansion to Value: The Next Phase of India’s Highways’ – he noted that while the country has successfully expanded its road network over the past two decades, the industry’s priorities are now shifting towards building infrastructure that delivers greater lifecycle value, durability, safety and operational efficiency. With funding pressures, asset monetisation and evolving project models changing the sector’s dynamics, he said the focus must now move beyond kilometres constructed to the quality and long-term performance of every asset.

Dr Brijesh Dixit, Managing Director, Maharashtra State Infrastructure Development Corporation (MSIDC), reminded delegates that successful infrastructure delivery is ultimately a collective effort. Emphasising on collaboration between government, industry and engineering professionals, he remarked, “There is no loser in a winning team, and there is no winner in a losing team,” urging stakeholders to work together to deliver projects with quality, financial sustainability and technological excellence.

Delivering the keynote address, Bidur Kant Jha, Director, New Technologies for Highway Development, Ministry of Road Transport & Highways (MoRTH), outlined the Government’s long-term vision for India’s highway network. Highlighting the country’s 6.26 million km roads network, he spoke about the growing adoption of digital planning tools such as BIM and GIS, bridge health monitoring systems and Integrated Smart Transport Corridors under the Vision 2047 roadmap. He emphasised that while India remains open to global innovations, every new technology must be adapted to Indian conditions before large-scale deployment.

Addressing the gathering during the awards ceremony, Tamta underlined the increasing role of specialised equipment and modern construction technologies in executing complex infrastructure projects across diverse terrains. Referring to challenging tunnel projects in Uttarakhand, he noted how advanced machinery has transformed execution capabilities, while also acknowledging the rapid evolution of Indian contractors into globally competitive infrastructure companies. Recognising excellence through industry awards, he said, motivates organisations to continually raise performance standards and embrace innovation.

Meanwhile, Dr Sanjay Mukherjee, IAS, Metropolitan Commissioner, MMRDA, highlighted that infrastructure development must increasingly focus on integrated urban mobility. Reflecting on Mumbai’s engineering journey – from its historic underground utility network to the Coastal Road and other transformative projects – he underlined that future infrastructure planning must seamlessly integrate roads, metro systems and public transport to create efficient, multimodal cities.

Uttar Pradesh takes centrestage

One of the highlights of the second day was Uttar Pradesh’s comprehensive presentation on its infrastructure-led industrial transformation.

Srihari Pratap Shahi, IAS, Additional CEO, Uttar Pradesh Expressways Industrial Development Authority (UPEIDA), demonstrated how the state’s expanding expressway network is evolving into a catalyst for industrial development through integrated manufacturing and logistics clusters. Expressways, he noted, are no longer merely transport corridors but engines of economic competitiveness.

Building on this narrative, Deeksha Jain, IAS, Additional Chief Executive Officer, Uttar Pradesh State Industrial Development Authority (UPSIDA), showcased the state’s rapidly expanding industrial ecosystem supported by extensive expressway connectivity, dedicated freight corridors, airports, industrial townships and investor-friendly policies. She highlighted Uttar Pradesh’s strong manufacturing growth, expanding industrial land bank, plug-and-play infrastructure and increasing use of digital governance to facilitate investments.

Further underlining the significance of the platform, Deepak Kumar, IAS, Infrastructure & Industrial Development Commissioner, Government of Uttar Pradesh, remarked, “RAHSTA provides an excellent platform for states to showcase our infrastructure progress and investment ecosystem. Uttar Pradesh has transformed significantly over the past decade, backed by more than 34 investor-friendly industrial policies, and platforms like RAHSTA help communicate these developments to industry stakeholders from across the country.”

Ideas that shaped the industry conversation

The two-day conference featured seven panel discussions, each examining a critical dimension of India’s evolving roads and highways sector.

The opening discussion on ‘Financing Roads & Highways in a Capital-Constrained Era’ brought together experts from Cube Highways, NIIF, SBI Capital Markets, Centrum Capital and Bandhan Infra Fund, who examined how the financing landscape is changing. Discussions revolved around asset monetisation, InvITs, institutional investments and new funding structures, with panellists agreeing that better project preparation, transparent governance and predictable returns will be crucial for attracting long-term capital into infrastructure.

Attention then shifted to execution realities during the panel on ‘Contractors’ Perspective: Execution Realities, Risks & the Quality Imperative.’ Representatives from GHV Infra Projects, PNC Infratech, NCC and Maccaferri candidly discussed the challenges of delivering projects amid contractual complexities, land acquisition delays, rising costs and tight timelines. While execution pressures remain significant, the discussion reinforced that better collaboration across the project value chain is essential for achieving both speed and quality.

Day 2 opened with a technically rich discussion on ‘Designing Roads for Sustainability, Durability & Climate Resilience’. Experts from CSIR-CRRI, IIT Bombay, IIT Madras, Zydex Group and SRMB Steel explored advanced pavement technologies, recycled materials, climate-resilient designs and scientific construction practices that can significantly improve durability while lowering lifecycle costs. Sustainability, they agreed, must become an integral part of road design rather than an afterthought.

The subsequent session on ‘Bridges & Tunnels: Complex Engineering, Safety & Future Readiness’ highlighted the growing complexity of India’s infrastructure projects. Panellists discussed advances in structural engineering, digital monitoring, risk management and safety practices that are enabling the successful delivery of increasingly ambitious bridge and tunnel projects across the country.

Technology remained a recurring theme during the discussion on ‘Technology as a Risk-Mitigation Tool for Developers & Investors’. Experts explained how AI, BIM, drones, predictive analytics, digital twins and intelligent monitoring systems are helping improve project planning, minimise execution risks, strengthen quality assurance and enhance asset management throughout the infrastructure lifecycle.

The construction equipment panel brought together leading industry experts to examine how technology, sustainability and digitalisation are redefining construction equipment in an era of rising cost pressures. Discussions centred on enhancing productivity, reducing lifecycle costs and preparing the industry for India’s infrastructure ambitions leading up to 2047.

The conference concluded with an engaging CXO Forum on ‘Rebuilding Confidence in India’s Roads & Highways Sector’, where senior industry leaders emphasised that stronger governance, better project preparation, digitalisation, transparent contracting and closer public-private collaboration will be essential to sustain India’s infrastructure growth over the coming decades.

Technology and recognition under one roof

Beyond the conference halls, RAHSTA Expo reflected the technological transformation underway across India’s road infrastructure ecosystem. Leading equipment manufacturers, technology companies and material suppliers showcased advanced construction equipment, intelligent digital platforms, pavement technologies, structural materials and productivity-enhancing solutions designed to improve project efficiency and asset performance. The exhibition created valuable opportunities for contractors, consultants, government agencies and project developers to evaluate new technologies while interacting directly with solution providers.

The event also served as a celebration of excellence through the RAHSTA Awards 2026, which recognised outstanding achievements across road construction, contracting, materials, equipment, technology, safety, sustainability and infrastructure development. Presented by Minister Tamta, the awards honoured organisations that are setting new benchmarks for quality, innovation and execution across India’s roads sector.

RAHSTA Expo 2026 also received extensive support from across the infrastructure ecosystem. Alongside leading corporate sponsors, the event was backed by industry bodies including the Builders Association of India (BAI), Construction Equipment Rental Association (CERA), Consulting Engineers Association of India (CEAI), International Road Federation (IRF), CSIR-CRRI, CILT India, All India Transporters Welfare Association, Hydraulic Trailer Owners Association (HTOA), Gujarat Contractors Association, Bitumen Forum, Fluid Power Society of India, Indian Institute of Material Management, Ministry of Ports, Shipping and Waterways, Gati Shakti Vishwavidyalaya and Mumbai First, reflecting the industry’s collective commitment to advancing India’s road infrastructure.

As the curtains came down on the two-day event, one message resonated throughout the conference: India’s highways story is entering a new chapter. While expansion will continue, the future will increasingly be defined by smarter planning, stronger partnerships, digital transformation, sustainable engineering and long-term value creation. By bringing together the entire infrastructure value chain on a single platform, RAHSTA Expo 2026 once again demonstrated why it has become one of the country’s most influential forums for shaping the future of roads, highways, bridges and tunnels.

Economy & Market

Fornnax Names Lukas Baur as Authorised Service Partner to Bolster EU Operations

Published

4 weeks ago

July 23, 2026

admin

Strapline: Fornnax Technology has appointed NOBA Maschinenservice’s Lukas Baur as its authorised service partner for the European Union, strengthening its commitment to delivering fast, reliable, and localised after-sales support across the region.

Fornnax Technology, a leading manufacturer of industrial shredding solutions, has announced the appointment of Mr. Lukas Baur of NOBA Maschinenservice as its authorised service partner for the European Union. The partnership, formalised under the authorisation of Fornnax CEO Mr. Jignesh Kundaria, reinforces the company’s commitment to providing dependable, localised service support to its expanding customer base across Europe.

Strengthening Service Through Proven Expertise

With over two decades of experience in servicing, maintaining, and overhauling industrial shredders, Mr. Baur brings extensive technical expertise to the partnership. His capabilities span welding, hardfacing, shaft and knife rebuilding, complex assembly, hydraulics, and complete electrical engineering services, delivered in collaboration with a trusted partner company based in Halle/Saale.

Operating from Worbis, Germany, Mr. Baur is strategically positioned to provide emergency support across the European Union within 24 hours, covering an operational radius of approximately 1,000 kilometres.

Supporting this capability is a well-equipped service infrastructure comprising 12 Mercedes Sprinter service vans, a team of 24 skilled technicians, specialised bearing-change tools, a fully equipped hydraulic workshop, and a 1,000-square-metre facility with a five-ton crane track. Together, these resources position his team to manage the complete spectrum of Fornnax’s European service requirements efficiently and reliably.

Partnership Driven by Industry Insight

Having spent years servicing Eldan, Lindner, and Vecoplan shredders across the European recycling industry, Mr. Baur’s decision to collaborate with Fornnax is rooted in his understanding of market needs and customer expectations. His experience has provided valuable insight into what recycling plant operators require—not only from their machinery but also from the service teams supporting them.

According to Mr. Baur, Fornnax’s reputation for robust machine construction, superior wear protection, and maintenance-friendly design made the partnership a natural fit.

The collaboration comes at a time when Europe’s tyre recycling industry is facing mounting challenges, including rising cost pressures, shrinking margins, delayed investments, and a shortage of skilled labour. Mr. Baur believes these conditions reinforce the need for technically strong service partners capable of delivering rapid, dependable support.

Commenting on the partnership, he said, “Fornnax, with its exceptional price-performance ratio and superior quality, has the potential to become a market leader in Europe. We would like to be their service partner in this journey.”

Comprehensive Support Across the Equipment Lifecycle

As Fornnax’s authorised service partner, Mr. Baur will oversee the complete lifecycle support of the company’s equipment throughout the European Union. His responsibilities will include installation, commissioning, preventive maintenance, emergency repairs, and spare parts support across mechanical, hydraulic, and electrical systems.

Looking ahead, he also plans to develop a centralised spare parts distribution hub for European customers, particularly if Fornnax establishes a warehouse facility in Worbis to facilitate faster deliveries. To further strengthen service coverage, Mr. Baur intends to expand operations by adding two to three additional service teams and vehicles each year, progressively increasing capacity across the continent.

A Shared Commitment to Customer Excellence

Highlighting the strategic importance of the partnership, Mr. Jignesh Kundaria, Director and CEO of Fornnax, said:

“We strongly believe that by continuously improving our service quality and customer satisfaction index, we can build long-term relationships with our customers. Higher customer satisfaction leads to greater trust, which significantly increases repeat orders and ultimately drives sustained growth in our sales revenue.”

This customer-first philosophy underpins Fornnax’s strategy of building a dedicated European service partner network instead of relying solely on remote support. With Mr. Baur joining this network, customers across the European Union will benefit from faster response times, expert technical assistance, and dedicated on-ground support from a partner with extensive experience in high-throughput shredding operations.

Mr. Baur’s appointment also reflects Fornnax’s broader ambition to establish itself as the preferred shredding solutions provider for the European recycling industry, marking another important milestone in the company’s international growth strategy.

Concrete

Reimagining the Future

Published

4 weeks ago

July 21, 2026

admin

From LC3 and AI-driven kilns to RDF gasification, ICR explores the full breadth of technological innovation reshaping India’s cement industry. Low-carbon materials, digital manufacturing, alternative fuels and breakthrough concrete science are collectively advancing the sector’s transition from high-emission commodity producer toward a net-zero, infrastructure-ready future.

Innovation has become the defining force shaping the future of the cement industry. As the world’s second-largest cement producer, India is witnessing rising demand driven by infrastructure development, urbanisation, affordable housing, and industrial growth. At the same time, the International Energy Agency (IEA) estimates that cement production accounts for nearly 7 per cent to 8 per cent of global CO2 emissions, with clinker manufacturing contributing the largest share, making innovation an operational necessity. The industry is therefore investing heavily in low-carbon cement technologies, artificial intelligence (AI), digital manufacturing, alternative fuels, renewable energy and carbon capture, utilisation and storage (CCUS). Innovations such as limestone calcined
clay cement (LC3), supplementary cementitious materials (SCMs), AI-driven process optimisation and automated quality control are enabling manufacturers to produce more sustainable, efficient, and high-performance cement.
According to the Global Cement and Concrete Association (GCCA), achieving net-zero emissions will require a combination of material innovation, digital transformation, circular economy practices and collaborative research, making innovation central to the industry’s long-term competitiveness and India’s sustainable infrastructure growth.

Next-generation cement
The future of cement lies in reducing its dependence on clinker-the most carbon-intensive component of cement-through the adoption of low-carbon materials and advanced blended cement technologies. Products such as Portland Pozzolana Cement (PPC), Portland Slag Cement (PSC), Portland Composite Cement (PCC), and LC3 are driving this shift by replacing clinker with SCMs like fly ash, GGBS, calcined clay and limestone.
According to GCCA, SCMs can replace 30 to 50 per cent of clinker, with some applications exceeding 70 per cent, significantly reducing carbon emissions without compromising strength or durability. These blended cements also improve concrete performance by enhancing durability, reducing permeability, and increasing resistance to chloride and sulphate attacks. As the availability of traditional SCMs declines with the decarbonisation of the power and steel sectors, the industry is increasingly exploring alternative materials and next-generation cement formulations to support long-term sustainability.
Shrivats Singhania, Deputy Managing Director, JK Lakshmi Cement, says, “Innovation is enabling the cement industry to address one of its most important challenges – producing more with fewer resources and lower emissions. Across the value chain, manufacturers are deploying technologies that simultaneously improve operational efficiency and advance sustainability goals. For example, greater adoption of alternative fuels, waste heat recovery systems, renewable energy, and digital process controls is helping reduce energy consumption and optimise resource utilisation. Data-driven manufacturing allows plants to monitor operations in real time, improve equipment reliability, minimise downtime, and reduce wastage, resulting in both environmental and economic benefits.”
“Meaningful progress is also being achieved through material innovation. The growing use of blended cements and next-generation products such as LC3 reduces dependence on clinker, the most carbon-intensive component of cement production, thereby lowering embodied carbon without compromising performance,” he adds.
Among emerging technologies, LC3 has gained global recognition as one of the most promising low-carbon cement innovations. In a standard formulation, LC3 comprises approximately 50 per cent clinker, 30 per cent calcined clay, 15 per cent limestone, and 5 per cent gypsum. LC3 can reduce CO2 emissions by up to 40 per cent compared with Ordinary Portland Cement (OPC) while delivering comparable strength and enhanced durability. Its reliance on abundant, locally available raw materials, rather than industrial by-products, makes it highly scalable and well suited to countries like India.
According to the LC3 Project, nearly 75 per cent of cement plants worldwide could adopt LC3 using existing manufacturing infrastructure, potentially reducing global CO2 emissions by over 400 million tonnes annually, if adopted at scale globally. India’s introduction of BIS standard IS 18189:2023 for LC3, coupled with its adoption in projects such as the Noida International Airport, marks a step toward commercial implementation. As demand for sustainable construction grows, LC3 is poised to become a cornerstone of low-carbon infrastructure development.

Making of a smart cement plant
The modern cement plant is rapidly evolving into a digitally connected, AI-enabled manufacturing ecosystem where data drives every aspect of production – from raw material proportioning and kiln operations to quality control, maintenance and energy management.
According to IEA, digital technologies can improve energy efficiency in heavy industries by 10 per cent to 20 per cent. Advanced process control systems in cement plants have demonstrated the potential to reduce thermal energy consumption by 3 to 5 per cent, lower electricity consumption by 2 to 10 per cent, and improve kiln throughput and clinker quality. AI-powered predictive maintenance further helps reduce unplanned equipment downtime by 30 to 50 per cent and extend equipment life by continuously analysing sensor data to detect failures before
they occur.
Jignesh Kundaria, Director and CEO, Fornnax Technology, says, “AFR is no longer viewed solely as a sustainability initiative. It has become a strategic business priority for cement manufacturers. Rising fuel costs, stricter environmental regulations, and growing pressure to reduce dependence on conventional fuels are accelerating AFR adoption across the industry. However, the success of an AFR project depends heavily on how effectively waste is processed before it reaches the kiln. Poor preprocessing can negatively impact kiln performance, fuel efficiency, and emission control systems. Inconsistent fuel
quality often forces operators to make frequent adjustments, reducing throughput and increasing energy consumption.”
Dr Kapil Kukreja, General Manager, NCCBM, says, “Variations in composition, particle size, and calorific value can lead to inconsistent combustion behaviour resulting in fluctuating heat release patterns. These fluctuations can affect process stability, temperature control and clinker quality. Additionally, incomplete combustion of RDF particles can result in increased emissions, higher unburnt carbon content, and operational difficulties within the calciner system. Higher ash and inert content of RDF can dilute the clinker quality and reduce calciner efficiency.”
Meanwhile, digital twins are allowing manufacturers to simulate entire production processes, optimise kiln performance, evaluate process changes virtually, and reduce operational risks before implementation. Automated Laboratory Information Management Systems (LIMS), coupled with online and offline XRF and XRD analysers, are delivering real-time monitoring of clinker chemistry and mineralogy, ensuring tighter quality control, lower clinker variability and more consistent cement performance.
Dr Prateek Sharma, Group Project Manager, NCCBM, explains, “Chlorides and alkalis present in RDF can lead to excess buildup and blockages in the kiln and calciner increasing the downtime of cement plants. Hence, issues with direct utilisation of RDF establishes the need for fuel conditioning and alternative utilisation approaches that can maximise the energy potential of RDF while minimising adverse impacts on plant operation. RDF gasification emerges as an efficient tool for converting solid RDF into syngas which can be used as a fuel with improved characteristics.”
Digitalisation and intelligent manufacturing will be among the most critical enablers of achieving the cement industry’s net-zero ambitions by improving operational efficiency while simultaneously reducing energy consumption and greenhouse gas emissions, confirms a GCCA report.

From research to reality
While the cement industry has made remarkable progress in developing breakthrough technologies, the transition from laboratory research to large-scale commercial deployment remains one of its greatest challenges. The successful adoption of innovations such as LC3), CCUS, advanced alternative fuels, green hydrogen and novel SCMs depend not only on technical feasibility but also on economic viability, regulatory support, raw material availability, and market acceptance.
Veerendra Jamdade, CEO and Founder, Vritti Solutions, states, “The cement industry has a market that is constantly in flux, due to factors such as infrastructure investment, seasonality of demand, fuel costs, building activity by region and general economic cycles; therefore, having accurate forecasts is very important in this type of market. Traditional ERP systems are primarily data repositories with limited analytic functionality; thus, they capture transactional and operational information but generally lack advanced analytical capabilities for converting captured data into actionable information. This
affects everything from demand forecasting and inventory planning through procurement and production scheduling.”
According to IEA, technologies that are still at the demonstration or early commercial stage-including CCUS and next-generation low-carbon binders-are expected to contribute nearly 40 per cent of the emissions reductions required for the global cement sector to achieve net-zero emissions by 2050, underscoring the importance of accelerating their scale-up. This requires robust R&D ecosystems, stronger collaboration between cement manufacturers, research institutions, technology providers,
equipment suppliers, and policymakers, as well as supportive standards and financial incentives to reduce investment risks.
Ashutosh Pandita, Director – Head, Cement Business, TKIL Industries, elaborates, “The cement industry’s most transformative innovation today is the increased use of alternative fuels and raw materials (AFR), supported by advanced feeding systems and process technologies that are driving both operational efficiency and decarbonisation. Looking ahead, oxyfuel combustion and carbon capture technologies remain underappreciated but hold immense potential for enabling deep reductions in carbon emissions and accelerating the industry’s journey towards net-zero production. By 2030, cement manufacturing is expected to become significantly more sustainable, energy-efficient, and technology-driven, with widespread adoption of AFR, low-clinker cement technologies, greater digitalisation and automation, and the early commercial deployment of carbon capture solutions, all supported by stronger industry collaboration and a shared commitment to achieving long-term sustainability goals.”
In India, organisations such as the National Council for Cement and Building Materials (NCCBM), leading academic institutions, and major cement companies are working together to develop and validate emerging technologies, while the introduction of standards such as IS 18189:2023 for Limestone Calcined Clay Cement (LC3) marks a significant step towards commercial adoption. However, challenges such as high capital investment, long validation cycles, limited infrastructure for technologies like CCUS, fluctuating availability of alternative raw materials, and customer acceptance continue to slow implementation. Bridging the gap between research and commercial reality will therefore require sustained investment in innovation, knowledge-sharing, pilot projects, policy support, and industry-wide collaboration to ensure that promising technologies evolve into scalable, economically viable solutions capable of transforming the future of cement manufacturing.

Creating a green future
Clinker production will increasingly rely on low-carbon technologies such as LC3, high-volume SCMs, AFR, renewable energy, waste heat recovery, and eventually CCUS, enabling manufacturers to significantly reduce their environmental footprint.
Achieving net-zero concrete by 2050 will require a combination of clinker substitution (around 37 per cent of cumulative CO2 reductions), carbon capture technologies (approximately 36 per cent), and improvements in thermal efficiency, renewable energy, and circular economy practices.
Industry Expert SA Khadilkar comments, “Customer requirements are a key driver of innovation in the cement industry, influencing product development, process improvements, sustainability initiatives, and digital solutions. Innovation is most effective when it addresses real market needs, particularly in areas such as performance, durability, and application-specific requirements. Around a decade ago, ACC and Ambuja Cements (now Adani Cement) recognised this shift and introduced performance-oriented blended cement brands with enhanced durability, reduced water penetration, and OPC-like properties. Their success encouraged other major cement manufacturers to develop specialised cement brands with unique performance characteristics, demonstrating how product innovation has evolved to meet changing customer expectations.”
“Ultimately, customer expectations have transformed innovation from a technology-driven exercise into a market-driven strategy, ensuring that new developments create measurable value across the construction value chain,” he adds.
India is expected to add nearly 500 million square metres of urban built-up area by 2030, driving sustained demand for greener, more durable, and higher-performing construction materials, according to NITI Aayog. Meeting this demand will require cement manufacturers to evolve from commodity producers into integrated providers of sustainable building solutions, supported by data-driven manufacturing, collaborative R&D, customer-centric product innovation, and circular resource management. The cement plant of tomorrow will therefore be defined not only by its production capacity but also by its ability to manufacture smarter, cleaner, and more sustainable construction materials that support India’s ambitious infrastructure and climate goals.

Conclusion
The path ahead is clear in its direction, if not yet in its pace. India’s position as the world’s second-largest cement producer, combined with its infrastructure ambitions and its 2070 net-zero commitment, makes this transition both urgent
and consequential.
What this article has made evident is that no single technology will carry the industry to net zero. LC3 addresses clinker dependency. Digital manufacturing addresses efficiency and waste. Alternative fuels address fossil fuel dependence. CCUS addresses the residual process emissions that no other lever can reach. Each is necessary. None is sufficient alone. The industry’s task is to advance all of them simultaneously, at a pace that matches the scale of the challenge.
The plants that will build tomorrow’s highways, airports and homes will need to do so with a fraction of today’s carbon footprint.

Innovations in cement and concrete

Carbon mineralisation in concrete: A 2026 peer-reviewed study in the Journal of the American Ceramic Society by MIT’s Masic Lab and CarbonCure Technologies used in-situ Raman microspectroscopy to show that CO2 injected during cement mixing triggers a three-stage hydration sequence, producing a more uniform microstructure with approximately 13 per cent higher early strength while permanently sequestering carbon within the concrete matrix.

Source: www.carboncure.com

Zero-clinker geopolymer blocks: Theseus Development manufactures geopolymer blocks using upcycled aluminosilicate waste from quarries and mines through an inorganic polymerisation process, achieving up to 80 per cent lower embodied carbon compared to conventional cement blocks. An interlocking block design reduces mortar requirements, lowering construction costs while eliminating clinker entirely from the production process.

Source: www.rmi.org

3D-printed basalt fibre grids: Austrian startup Fiber Elements, founded in 2023, uses robotically wound continuous basalt fibres arranged into three-dimensional reinforcement grids that replace steel in concrete structures. The resulting composites are three times stronger than steel, weigh two-thirds less, resist corrosion entirely and reduce CO2 emissions by up to 70 per cent compared to conventional steel-reinforced concrete.

Source: www.eitmanufacturing.eu

Self-healing concrete: Dutch company Basilisk leads commercial deployment of bacteria-based self-healing concrete, with licensed production now active in Japan and a highway viaduct pilot planned for 2026. Dormant Bacillus bacteria embedded in the mix activate upon crack formation, metabolising nutrients to precipitate calcium carbonate that autonomously seals fractures. The global self-healing concrete market is projected to grow significantly through 2031, driven by green building mandates and infrastructure agencies targeting lower maintenance costs and extended structural life.

Sources: www.thelegaljournalontechnology.com and www.mordorintelligence.com