The numbers behind India’s booming warehousing and industrial supercycle

A market moving from momentum to scale

India achieved its strongest year on record for warehousing absorption in 2025, with 72.5 million square feet transacted across the eight primary markets, representing a 29% increase year on year. 

The final quarter alone accounted for 23.4 million square feet - the highest quarterly volume ever observed - reinforcing the strength and consistency of occupier demand, while total warehousing stock reached approximately 565 million square feet, reflecting both accelerated development activity and sustained leasing velocity across major urban centres. 

Core markets consolidate leadership

Leasing activity remains anchored in key metropolitan regions, with Pune, Mumbai, Delhi-NCR, Chennai, and Bangalore leading performance in the last year. 

Pune emerges as the largest market, driven predominantly by manufacturing demand, while Mumbai continues to benefit from strong activity in Bhiwandi. Delhi-NCR’s growth is closely tied to the Dedicated Freight Corridor, reinforcing the link between infrastructure and absorption.

Chennai and Bangalore demonstrate a high share of Grade-A stock, reflecting occupier preference for institutional-quality assets. Across these leading markets, demand is increasingly aligned with supply chain optimisation, proximity to consumption centres, and access to multimodal infrastructure.

Manufacturing takes the lead in demand

The composition of demand highlights a structural shift. Manufacturing accounted for 47% of total absorption in 2025, growing 55% year on year - driven by sectors such as automotive, energy, and chemicals, with production increasingly concentrated in key industrial clusters.

Government initiatives, including production-linked incentives and broader supply chain diversification strategies, are reinforcing India’s position within global manufacturing networks. 

Additionally,“China Plus One” strategy continues to act as a catalyst, encouraging both domestic and international players to expand their footprint.

Third-party logistics (3PL) providers remain a critical component of the ecosystem, contributing 27% of demand. However, the sector is evolving towards more integrated, platform-based models that manage supply chains across multiple geographies. 

E-commerce, while representing a smaller share at 11%, records one of the fastest growth rates, supported by rising online penetration and a shift towards leased infrastructure over owned assets.

Secondary markets emerge as growth engines

While primary cities continue to dominate, secondary markets are gaining traction as the next frontier of expansion. Secondary markets accounted for approximately 11.2 million square feet of transactions in 2025, representing 13% of total national leasing activity. 

Importantly, the quality profile of these markets continues to improve rapidly, with Grade-A facilities accounting for 54% of take-up, compared to 53% in the previous year.

Cities such as Lucknow, Surat, Jaipur, Nagpur, Indore, Guwahati, Bhubaneswar, and Vadodara are increasingly attracting occupiers seeking lower operating costs, proximity to emerging consumption centres, and improved multimodal infrastructure connectivity. 

Nagpur recorded the strongest annual growth among secondary markets in 2025, with transactions rising by more than 200% year-on-year.

The rise of these emerging hubs is closely linked to India’s broader infrastructure transformation. As freight corridors, multimodal logistics parks, industrial corridors, and port connectivity projects move closer to completion, previously peripheral cities are becoming integrated into national supply chains in ways that were not possible a decade ago.

Grade-A becomes the standard

A defining feature of the current cycle is the dominance of Grade-A warehousing. In primary markets, these assets account for 63% of transactions, while secondary markets are close behind at 54% - reflecting a clear preference among occupiers for higher-quality facilities that offer operational efficiency, compliance, and scalability.

At the same time, vacancy rates remained relatively contained at around 11.6%, indicating a healthy balance between supply and demand, while rental values increased across all major markets in 2025, further underscoring the resilience of the sector and the willingness of occupiers to pay for quality.

Pune recorded the highest average Grade-A rents at approximately INR 28 per square foot per month, while Chennai and Kolkata both reached INR 25 per square foot per month. Hyderabad, Bangalore, Mumbai, Delhi-NCR, and Ahmedabad also registered positive rental appreciation during the year.

Despite strong development activity, a significant gap remains between current supply and future requirements. The county’s Grade-A warehousing stock stands at approximately 270 million square feet today, but is expected to reach around 450 million square feet by 2030 to support projected demand.

This implies the need to add roughly 180 million square feet of high-quality space within a relatively short timeframe. 

The availability of land, particularly in secondary markets, provides a foundation for this expansion, but execution will depend on continued alignment between public infrastructure investment and private sector development.

Consumption and e-commerce reshape demand dynamics

India’s consumption economy is projected to grow from approximately USD 1.06 trillion in 2025 to nearly USD 1.89 trillion by 2030, creating significant implications for the country’s logistics and warehousing landscape.

E-commerce penetration is expected to more than double, rising from 7.5% to 15.5%, fundamentally reshaping warehousing requirements across urban, regional, and last-mile distribution networks.

The significance of this transition extends beyond rising retail volumes. Online commerce is substantially more logistics-intensive than traditional retail, requiring two to three times more warehousing space per dollar of sales due to the need for fulfilment centres, inventory buffering, reverse logistics, and accelerated delivery capabilities. 

As a result, warehousing requirements in India are expected to expand at a pace that outstrips consumption growth itself, with consumption-driven demand alone projected to reach approximately 450 million square feet by 2030. 

Nearly 330 million square feet of this volume is expected to be concentrated within the country’s eight primary logistics markets, while secondary cities are forecast to contribute an additional 120 million square feet.

Trade expansion amplifies logistics requirements

India’s expanding role in global trade is emerging as another major catalyst for warehousing growth, supported by projections that the country’s GDP will increase from USD 4.1 trillion today to approximately USD 7.3 trillion by 2030. 

Over the same period, merchandise exports are expected to more than double from USD 437 billion to USD 1 trillion, while imports are forecast to surpass USD 1.5 trillion, significantly increasing the scale and complexity of domestic distribution networks.

This rapid trade expansion is already reshaping both the format and geographic distribution of warehousing infrastructure. 

Rising import volumes are driving demand for large-format Grade-A logistics facilities along Dedicated Freight Corridor routes, while export-led manufacturing growth is accelerating the need for bonded warehouses and specialised logistics assets positioned across key industrial corridors.

Simultaneously, the expansion of pharmaceutical and agricultural exports is intensifying demand for temperature-controlled cold chain infrastructure near ports and airports, where institutional-quality supply remains limited.

The next phase of the Indian warehousing sector

India’s warehousing market is no longer at the beginning of growth. It is entering the beginning of scale.

Government-backed infrastructure investment, accelerating manufacturing activity, rising domestic consumption, expanding global trade integration, and rapidly evolving supply chain models are collectively creating one of the world’s most compelling industrial and logistics real estate opportunities. 

The challenge now lies not in demand generation, but in supply delivery. With approximately 180 million square feet of additional Grade-A stock required by 2030, developers, investors, infrastructure operators, and policymakers will need to accelerate land unlocking, multimodal integration, and high-quality development across both established and emerging logistics markets. 

The foundations of India’s next logistics era are already being built. The next phase will determine how quickly the country can scale the infrastructure required to support its ambitions as a global manufacturing, consumption, and export powerhouse.
 

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These takeaways were shared at the GRI Warehousing and Logistics Indian Industrial Forum 2026, co-hosted by Khaitan & Co.