The warehouse next door: Land-use reforms and the 10-minute debate

Quick commerce has entered 2026 in the crosshairs. The government has banned quick-commerce companies from advertising their services as a “10-minute delivery” model. The ban followed protests by platform workers seeking to end the 10-minute delivery window, citing road safety concerns. 

However, the quick-commerce model operates by pushing inventory near demand, rather than expecting riders to travel at high speeds. To ensure quick delivery, companies aim to keep the distance between the customer and the dark store at 1.5–3 km for most orders. 

One concern about fast delivery is the risk of rash driving on roads that already suffer from poor traffic management. Longer distances can make it more challenging to guarantee rider safety and the safety of other road users while meeting the promised delivery window. However, an effective way to maintain safety and deliver fast is to reduce the delivery radius. 

 

If safety is the goal, the appropriate policy lever must enable a higher concentration of dark stores within or near residential neighbourhoods. However, India’s land-use regulations undermine this solution. State governments shape dark-store density through land-use regulations.

 

These regulations govern the location of a dark store, the facility’s minimum size, and the maximum floor area. Taken together, these rules can drive dark stores out of neighbourhoods. The farther the dark store from the customer, the greater the delivery time and the higher the traffic exposure.

 

Indian land-use regulations classify dark stores as warehouses and apply highway-side warehouse rules to local, small-scale urban infrastructure. Quick-commerce companies use dark stores as neighbourhood-fit micro-fulfilment centres to store products and dispatch online orders. Dark stores resemble small retail stores, but they are closed to the public and function as storage-and-picking hubs. This is why other regions of the world also classify dark stores as a storage category (France, New York, Australia).

 

Regulations force the construction of dark stores away from residential neighbourhoods, effectively increasing delivery radii. Cities such as Amaravati, Bengaluru, Chennai, and Lucknow prohibit warehouses, godowns and cold storages in residential zones.

 

Some cities permit warehouses in residential zones subject to conditions, offering a more proportionate alternative to blanket prohibitions. For instance, in Nagpur, warehouses can be built in residential areas provided the Chief Controller of Explosives clears the request. In Ludhiana, cold storage units must use Freon-based systems in residential areas. But in most cities, regulations separate housing and inventory, and in the process increase distance and risk per delivery.

 

Regulations allow warehouses only on wide roads, ostensibly to prevent congestion. However, road infrastructure in large parts of India is narrow. For instance, Bhubaneswar permits dark stores in residential areas, provided they abut a four-lane road. Typically, states require 12–18 metre-wide streets, but most neighbourhood streets measure only 6–12 metres wide. Such regulations can reduce the number of permissible dark-store sites near city centres.

 

Regulations also mandate minimum plot-size thresholds, restricting the supply of eligible plots in high-demand city centres. Dark stores can run profitable operations on a 200 sq m (approximately 2,000 sq ft) footprint, which translates to a plot of 300–400 sq m. However, several states mandate a minimum plot area for warehouses and storage units that exceeds the minimum viable plot size. Punjab requires a minimum plot of 500 sq m, while Gujarat requires a minimum building footprint of 350 sq m.

 

Some states permit more flexible operations: Odisha and Uttar Pradesh do not require a minimum plot size for warehouses. City centres host smaller land parcels, as land is at a premium. Regulations such as minimum plot-size requirements reduce the number of viable sites near high-demand areas, increasing on-road delivery risk.

 

Finally, regulations also cap the floor area that developers can build on a plot. These caps limit the amount of inventory firms can maintain near customers on small, expensive plots. Today, most dark stores operate as single-storey, ground-floor units for speed and ease of loading. So, limited floor space may not be a binding constraint. However, as demand surges and automation advances, companies may wish to innovate and experiment with multi-level in-city warehousing to stack more inventory on the same plot.

 

Many states permit warehouse projects to build only limited floor space: Haryana permits a floor-area ratio (FAR) of 0.75, Uttar Pradesh 0.8–1.2, and Delhi and Maharashtra about 1. These FAR limits preclude innovation in multi-level warehousing. Global cities such as Seattle, New York, Tokyo, Sydney, and Hong Kong already operate multi-level last-mile logistics facilities that enable companies to serve dense neighbourhoods. A low FAR limits companies’ ability to store inventory at scale.

 

India can learn essential lessons from global experiences. Land-use regulations have contributed to the failure of quick commerce in other countries. In 2023, Flink, Getir, and Gorillas decided to exit the French market because the government classified dark stores as warehouses rather than businesses, restricting their construction near residential areas.

 

In 2022, several dark stores in Amsterdam ceased operations after the government banned fast-delivery grocery companies from establishing dark stores in residential areas and restricted them to business parks. In both cases, regulations affected dark-store density in high-demand areas, making rapid delivery unviable.

 

Quick commerce is India’s boldest bet on transforming modern retail. It drew criticism from the outset, including on working hours and road safety. But India should not have to choose between a new retail infrastructure and protection. There is a middle ground—sensible land-use reforms that enable the development of a hyper-local, dense network of dark stores, making delivery trips shorter and safer.

 

Bhuvana Anand is co-founder, Prosperiti. Sargun Kaur is team lead, land-use regulations, Prosperiti. 

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