After foreign companies, including Google, Amazon, Uber have already made a beeline for the state, they Indian counterparts are following suit. Flipkart, India’s premier etailer, had decided to set up its largest warehouse in Telangana. This will be the company’s 16th warehouse in the country.
The facility will be spread over 2.2 lakh sq ft and is expected to ship out 1.2 lakh items every day once it becomes fully operational. The centre will have fully automated segregators, profilers to keep a tight check on quality, and automated conveyor belts for sorting inventory. The warehouse is expected to create 2,000 jobs directly and over 10,000 jobs indirectly.
Flipkart had mulled setting up the warehouse in Karnataka, but the government’s uncertainty over the tax code kept it away. “In terms of location preference, there were a few constraints in choosing Karnataka. We don’t have clarity on regulatory aspects for e-commerce here (Karnataka). If there is no clarity on the e-commerce taxation, no one would want to set up warehousing facilities here. There is an ongoing dialogue with the government and we hope to reach some clarity within a few days,” said Binny Bansal, cofounder and COO of Flipkart. “We were locating another place if not Karnataka, and Telangana was the next place from where we could reach majority of our customers in South India.There is clarity on taxation in Telangana. From there, we hope to reach 70% of our customers in South India in a single day,” he said.
Amazon had recently run afoul of the Karnataka government tax policies, which led to the state canceling the licences of many smaller merchants registered on Amazon.