Logistics, Warehousing and Supply Chain in India
Foreign investment in India logistics and warehousing: FDI routes for 3PL, freight, ports, e-commerce and FTWZ/bonded warehousing, plus the India-UAE corridor.
India is rebuilding its supply-chain backbone — and the opportunity is not one business. A warehousing developer, a 3PL operator, a freight forwarder, a port investor, an e-commerce platform and a free-trade-warehousing operator each enter through a different FDI, land, licence and customs path.
India has made logistics a national priority, and the reform is real: the National Logistics Policy and the PM Gati Shakti programme are integrating road, rail, port and air infrastructure, dedicated freight corridors and cargo terminals are reshaping the network, and global capital is pouring into warehousing and logistics parks. For a foreign investor the opportunity is broad — but it spans several distinct businesses. A third-party logistics and warehousing operator, a freight forwarder or customs broker, a port or multimodal operator, an e-commerce and express platform, a cold-chain specialist and a free-trade-warehousing operator each enter through a different structure, with a different FDI, licensing, real-estate and customs position. The first question is which part of the supply chain the company is in, and how asset-heavy that entry is.
At a glance
- India is rebuilding logistics through the National Logistics Policy, PM Gati Shakti, dedicated freight corridors, logistics parks and digital freight systems.
- The opportunity spans distinct businesses — 3PL and warehousing, freight and customs, ports and multimodal, e-commerce, cold chain, and FTWZ / bonded warehousing — each with its own structure.
- Logistics services are largely open to 100% foreign investment on the automatic route; warehousing and logistics-park development is permitted as construction-development, not prohibited real-estate dealing.
- Free Trade Warehousing Zones, bonded warehouses, ICDs and CFSs let a foreign group hold inventory, defer duty and keep re-export flexibility — central to the India-UAE hub-vs-distribution question.
- E-commerce FDI is a separate risk: the marketplace model is open, but FDI in inventory-based B2C e-commerce is prohibited.
- The right structure turns on the activity, the asset intensity and the licences — customs broking, multimodal-transport-operator registration and more.
India's logistics reform
India is rebuilding its logistics backbone through the National Logistics Policy, PM Gati Shakti, dedicated freight corridors, logistics parks, cargo terminals and digital freight systems, integrating what had been a fragmented, multi-modal system into a single planned network. The reform is real, but the headline cost figure should be treated carefully. Earlier policy discussions often cited India's logistics cost at around 13 to 14 percent of GDP, while more recent government-backed estimates, using a newer methodology, place the figure materially lower — on the order of 8 percent of GDP for 2023-24 — and note that the older number was based on partial or external data. The precise percentage is debated and methodology-dependent, so the right reading for an investor is the direction, not the decimal: the policy, the freight corridors, the cargo terminals, the logistics parks and the digital freight systems are steadily reducing friction, improving predictability and making Indian supply chains more competitive, visible in the hundreds of new Gati Shakti cargo terminals and the large transport-infrastructure outlay in the 2026-27 Budget. These positions are current to 2026 and should be confirmed at the time of decision.
The demand behind the reform is large and broadening. India's third-party-logistics market is on the order of US$38 billion, organised Grade-A warehouse stock has passed 300 million square feet with 3PL operators taking a growing share of leasing, and a wave of institutional and private-equity capital is funding new logistics parks. The sharpest recent shift is quick commerce: gross order value reached roughly ₹64,000 crore in FY2025 and is projected to multiply several times over by FY2028, pulling a dense layer of dark stores and micro-fulfilment into cities and turning last-mile and micro-warehousing into a distinct entry in its own right. The post-GST shift to hub-and-spoke distribution is what concentrated Grade-A capacity along the major consumption corridors — the Mumbai-Pune, Delhi-NCR, Bengaluru, Chennai-Hosur and Kolkata belts, anchored increasingly on the dedicated freight corridors — and the input-tax-credit flow on warehousing and transport is part of the unit economics, not an afterthought.
Which part of the logistics value chain are you entering?
Logistics is a set of distinct businesses, and the structure follows which one a company is in.
These are genuinely different entries with different customers, licences and real-estate needs. The mistake is to treat "logistics" as one decision; the starting point is the activity, the network position and the customer.
- A third-party logistics and warehousing operator builds or leases distribution and fulfilment capacity, increasingly in organised logistics parks — with the warehousing real-estate position to structure correctly.
- A freight forwarder, customs broker or multimodal transport operator moves and clears goods — through an operating entity and the relevant registrations and licences.
- A port, terminal, inland-container-depot, container-freight-station or multimodal-logistics-park investor takes positions in trade infrastructure — often through a concession or joint venture.
- An e-commerce or express-logistics operator runs fulfilment, sortation and last-mile delivery — through an operating entity, with the separate e-commerce FDI rules in view where it also runs the marketplace.
- A cold-chain or specialised-logistics operator builds temperature-controlled and sector-specific capacity for pharmaceuticals, perishables and similar goods.
- A free-trade-warehousing or bonded-warehousing operator holds inventory closer to Indian customers while managing duty, customs and re-export — the trade-linked distribution route.
Asset-heavy or asset-light?
A second lens cuts across the activities and decides much of the legal work: how asset-heavy the entry is. Asset-heavy infrastructure entries — a warehousing or logistics park, an inland container depot or container freight station, a cold-chain facility, a port terminal — turn on land, construction-development, approvals, leasing and the FDI position, and they are slow and capital-intensive. Asset-light service entries — a freight forwarder, a multimodal transport operator, a non-vessel-operating common carrier, a 3PL manager, a customs broker — turn on licences, contracts, liability and customer service-level agreements, and they can be stood up quickly. Platform and e-commerce logistics sit apart again, governed by the e-commerce FDI rules where the group controls a marketplace. Concession-led infrastructure — a port or rail terminal, a multimodal logistics park — runs on a concession, public-private-partnership or joint-venture structure with government approvals. And a corridor distribution model — a group running an India warehouse alongside a UAE trading hub — turns on customs, the CEPA, inventory, transfer pricing and re-export. Knowing which of these a business is determines the structure before any of the detail.
FDI and the warehousing real-estate question
Logistics services in India are largely open to 100% foreign investment on the automatic route, which makes most freight, 3PL and supply-chain businesses straightforward to own outright. The point that needs care is warehousing and logistics-park development, because it touches real estate. India bars foreign investment in the business of dealing in real estate — land trading and passive property dealing — but the policy is explicit that "real estate business" does not include the development of townships, the construction of commercial premises, roads, bridges or city- and regional-level infrastructure, and it permits 100% foreign investment on the automatic route for the operation and management of completed projects. Warehousing and logistics-park development can therefore be structured as permitted construction-development and infrastructure activity, provided it is a genuine development-and-operating business and not land trading or passive real-estate dealing. The distinction is decisive, and getting it right is the first thing for any warehousing-led entry — it is why so much global warehousing capital has been able to enter India directly.
Licences and regulatory permissions a logistics business needs
Logistics is a licensed business, and the permissions are activity-specific rather than generic. Multimodal transport from India using two or more modes can be carried out only by a person registered as a multimodal transport operator under the Multimodal Transportation of Goods Act, and customs broking is licensed under the Customs Brokers Licensing Regulations — neither is a free-for-all. Depending on the activity, the key licences and registrations may include:
- a customs broker licence;
- multimodal transport operator registration;
- port, terminal and cargo-handling permissions;
- warehouse and bonded-warehouse approvals, and free-trade-warehousing-zone authorisation;
- cold-chain, food, pharmaceutical or dangerous-goods permissions where relevant;
- GST, the Importer-Exporter Code, and state shops-and-establishment and labour registrations;
- an e-commerce FDI analysis where marketplace activity is involved.
FTWZ, bonded warehousing and trade-linked distribution
For trading and distribution groups, the logistics question is often not transport at all — it is where inventory is held, when customs duty is triggered, whether goods are imported for domestic sale or held for re-export, and whether an India facility should work alongside a UAE distribution hub. Free Trade Warehousing Zones, bonded warehouses, inland container depots and container freight stations are the tools for this, and where light manufacturing or processing is involved the MOOWR scheme (Manufacturing and Other Operations in a Warehouse) lets imported inputs and capital goods be held with customs duty deferred. They let a foreign group hold goods closer to Indian customers while deferring or managing customs duty, clearing through customs efficiently, and keeping re-export flexibility. The structure has to align several moving parts: the Indian entity, the customs permissions, the warehouse operator, who owns the inventory, the invoicing and valuation flow, the transfer pricing and the customer contracts. This is especially important for India-UAE corridor businesses that use the UAE as the regional trading and re-export hub and India as the domestic distribution market — the choice of where inventory sits, and under what customs status, is a structuring decision with real duty and tax consequences.
E-commerce logistics and marketplace FDI risk
E-commerce logistics carries a specific FDI risk that ordinary 3PL does not. Pure third-party logistics and fulfilment — moving and storing goods for others — is generally open to foreign investment. But it is different from owning inventory and selling through an online marketplace. India's e-commerce FDI framework permits 100% foreign investment on the automatic route for the marketplace model, where the platform only connects buyers and sellers, but it does not permit foreign investment in the inventory-based model of business-to-consumer e-commerce, where the platform owns the goods it sells. A foreign logistics group that also controls inventory, sellers, pricing or a marketplace must therefore analyse the e-commerce FDI rules separately from its logistics structure — the two are assessed differently, and conflating them is a common and avoidable error.
The India-UAE trade corridor
For a trade and distribution business, the India-UAE corridor is a material fact. The two countries' comprehensive economic partnership agreement, in force since 2022, has driven bilateral trade past US$101 billion in FY2025-26 — a second consecutive year above US$100 billion, with non-oil trade now about two-thirds of the total — and the two governments have set a target of US$200 billion by 2032; the UAE is also a major global re-export and distribution hub, sitting on India's doorstep. Many trading and logistics groups therefore operate both ends — an India base for the domestic market and the manufacturing and consumption it serves, and a UAE base for re-export, distribution and regional access. These are independent decisions, not an either-or, and the UAE entry — its free zones, ports and trade structuring — is covered on its own page. Where a group runs both, the trade flows, the customs and FTWZ position and the holding structure across the corridor are designed together.
How a foreign company enters
The vehicle follows the activity and the asset intensity. A services business — freight, 3PL, customs, e-commerce logistics — is usually a wholly-owned Indian company on the automatic route; a warehousing or logistics-park developer is structured as a construction-development and operating business consistent with the real-estate rules; a port or multimodal position is a concession or joint venture; a trade-linked operator builds around an FTWZ or bonded-warehouse permission. The activity registrations and licences — customs broking, multimodal-transport-operator registration, port and cargo permissions, warehouse approvals — are mapped to the business, the e-commerce FDI conditions are analysed where a marketplace is involved, and intercompany flows are tested under transfer pricing. Press Note 3 applies where the capital has a land-border connection. The structure follows the network position, not a single template.
Legal workstreams for a logistics entry
A logistics entry is rarely just an incorporation. The legal work usually runs across:
- choosing the operating, infrastructure, warehousing-development or trade-linked vehicle and the investment route;
- structuring warehousing and logistics-park development as permitted construction-development, not prohibited real-estate dealing, with the land lease or holding for the operating business;
- the activity registrations and licences — customs broker, multimodal transport operator, port and cargo permissions, warehouse and FTWZ approvals;
- the FTWZ, bonded-warehouse and customs structure — inventory ownership, duty timing, valuation, invoicing and re-export;
- the e-commerce FDI analysis, where the group also runs or supplies a marketplace;
- port, terminal and concession agreements, and joint-venture terms where relevant;
- customer, 3PL, warehousing-lease, transport and service-level agreements;
- transfer-pricing support for intercompany freight, technology, inventory and management flows;
- Press Note 3 analysis where ownership, control or capital has a land-border connection, and the corridor structure where the group also runs a UAE base; and
- planning the eventual exit or monetisation — an InvIT or REIT route, a platform or asset sale, or an institutional stake sale — and the repatriation route, so the holding structure is built for it.
Timeline and sequence
A logistics entry runs as overlapping workstreams whose pace depends on the activity and the asset intensity. A services business can be incorporated and licensed relatively quickly and scaled as the network builds. A warehousing or logistics-park development runs on a real-estate-and-construction clock — land, the development structure, approvals and the build, with anchor-customer leases secured alongside. A port or multimodal position runs on the concession or joint-venture timeline and the underlying project. A trade-linked FTWZ or bonded-warehouse operation turns on the customs permissions and the inventory and invoicing design. Across all of them, the activity licences and the real-estate or customs structure are settled before commitments are locked in. These are indicative stages only: real timelines vary widely by activity, location, approvals and the structure chosen, and nothing here is a commitment or guarantee of any particular timeframe — each entry should be planned on its own facts.
Where this goes wrong
- Treating "logistics" as one decision, when 3PL, freight, ports, e-commerce, cold chain and FTWZ entries are different businesses with different structures.
- Structuring a warehousing entry as property dealing, when it must be a genuine construction-development and operating business to be permitted.
- Running e-commerce fulfilment that also controls inventory or a marketplace without separately clearing the e-commerce FDI rules, where inventory-based B2C is prohibited.
- Missing the activity licences — customs broking, multimodal-transport-operator registration, port permissions, warehouse approvals — that the specific business needs.
- Holding inventory in India without designing the FTWZ, bonded-warehouse and duty position, and the India-versus-UAE hub question, deliberately.
- Leaving transfer pricing on intercompany freight, inventory and management flows until after operations begin.
How ATB Corporate helps
ATB advises foreign logistics, warehousing and trading businesses on entering India, matched to the network position and the asset intensity — 3PL and warehousing, freight and customs, ports and multimodal, e-commerce logistics, cold chain or trade-linked FTWZ and bonded warehousing. We work the operating, infrastructure, development or trade-linked vehicle and the route; the warehousing construction-development structure that keeps it clear of the real-estate-dealing bar; the activity licences and any e-commerce FDI analysis; the FTWZ, bonded-warehouse and customs design where inventory and re-export are in play; the concession or joint-venture terms; and the customer, lease and transfer-pricing position around it. For groups running both ends of the India-UAE corridor, the trade, customs and holding structure is designed across both markets. The opportunity is not merely the policy tailwind; it is building the right operating, land, licensing, customs and customer-contract structure around the network.
Logistics & Supply Chain — Answered
Yes, logistics services are largely open to 100% foreign investment on the automatic route, covering most freight, 3PL, customs and supply-chain businesses. Warehousing and logistics-park development is permitted as construction-development subject to conditions, and is distinct from prohibited real-estate dealing. Press Note 3 is assessed separately where the capital, control or technology has a land-border connection.
It can be either: warehousing parks, cold-chain facilities, inland container depots, container freight stations and port terminals are asset-heavy infrastructure entries turning on land, construction and approvals, while freight forwarding, multimodal transport, customs broking, 3PL management and technology-led logistics can be asset-light service entries. Which applies depends on the business, and the FDI, licence, land and contract structure changes accordingly.
Yes, where the structure and permissions are appropriate. Free Trade Warehousing Zones, bonded warehouses, inland container depots and container freight stations can help a foreign group hold inventory, manage and defer duty, clear customs and keep re-export flexibility. The Indian entity, the customs permissions, inventory ownership, the invoicing flow and the transfer-pricing model must be aligned — and this is often central to the India-versus-UAE hub decision.
The licences are activity-specific, not generic, and may include a customs broker licence, multimodal-transport-operator registration, port or terminal permissions, warehouse and bonded-warehouse or FTWZ approvals, cold-chain or sector-specific permissions, and GST, the Importer-Exporter Code and state-level labour and establishment registrations.
Yes — a foreign-owned company can provide third-party logistics and fulfilment, which are different from marketplace ownership. But if the group also controls an online marketplace, its sellers, inventory, pricing or customer sales, India's e-commerce FDI rules must be separately analysed: the marketplace model is open to foreign investment, but FDI in inventory-based business-to-consumer e-commerce is prohibited.
It is a structuring decision with real duty and tax consequences, and often the answer is both. India suits domestic distribution — held in a Free Trade Warehousing Zone, a bonded warehouse or under MOOWR to manage customs duty — while the UAE, on India's doorstep and linked by the CEPA, is a major re-export and regional-distribution hub. Many groups run both ends and design where inventory sits, and under what customs status, across the corridor; the UAE side is covered on its own page.
Yes. The rapid growth of quick commerce — gross order value of roughly ₹64,000 crore in FY2025, projected to multiply by FY2028 — is pulling a dense layer of dark stores and micro-fulfilment centres into cities, making last-mile and micro-warehousing a distinct entry with its own real-estate, technology and labour profile, separate from conventional Grade-A warehousing or 3PL.
MOOWR — Manufacturing and Other Operations in a Warehouse — lets a business import inputs and capital goods into a licensed private bonded warehouse with customs duty deferred, payable only on domestic clearance and not at all on re-export. For a trade-linked or light-processing operation it is a cash-flow and duty-management tool alongside Free Trade Warehousing Zones and ordinary bonded warehouses.
In Indian logistics, the economics turn on the operating, land and licensing structure around the network, and on whether inventory and re-export are designed through the FTWZ and customs position.
Licensing, approvals and any tax treatment are decided by the authorities on the facts. Talk to our team when you are ready.
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