Demand for industrial and logistics spaces in India reached a record high in 2025, with leasing volumes increasing nearly 19% year-on-year to 76.5 million square feet across 24 major cities. Manufacturing accounted for 29% of leasing activity, followed by logistics firms at 28% and e-commerce at 12%. Major cities such as Kolkata, Mumbai, Delhi-NCR, and Pune saw a 20% growth in leasing, with Delhi-NCR being the top market at 13 million square feet. Tier-II and Tier-III cities also experienced a 14.5% increase, indicating broad geographic demand. Savills India projects that supply and absorption of space will exceed 80 million square feet in the upcoming year, supported.
Global Manufacturing And Consumption
By ongoing manufacturing expansion and infrastructure development India’s industrial and logistics real estate market has entered a new growth phase, recording its highest ever leasing volumes as the country strengthens its position as a global manufacturing and consumption hub. The surge reflects a structural transformation in India’s economy, where supply chains are becoming more formalised, technology-driven, and geographically diversified. This record-breaking performance is not a short-term phenomenon but the outcome of multiple converging forces such as policy reforms, infrastructure investments, and rising domestic demand, all of which are reshaping.
How goods are produced, stored, and distributed across the country A major contributor to this leasing boom is India’s manufacturing resurgence, supported strongly by government-led initiatives. Programs like Make in India and the Production Linked Incentive (PLI) schemes have encouraged both domestic and global manufacturers to expand capacity within India. As companies set up new plants or scale existing operations, the demand for industrial land, factory sheds, and logistics parks has increased sharply. This trend is particularly visible in established industrial corridors and emerging clusters that offer proximity to ports, highways, and skilled labour.
Service Levels, Companies Are Reconfiguring
For a deeper look at manufacturing-driven investments E-commerce and quick commerce have further accelerated the need for high-quality warehousing infrastructure. With Indian consumers increasingly expecting faster deliveries and better service levels, companies are reconfiguring their supply chains to include large fulfilment centres, regional distribution hubs, and last-mile delivery facilities. This shift has resulted in a preference for Grade-A warehouses equipped with automation, higher floor load capacity, and better connectivity. Cities like Delhi-NCR, Mumbai, Bengaluru, and Hyderabad have emerged as key beneficiaries of this demand, owing to their strong consumption base and logistics connectivity.
Infrastructure development has played a decisive role in unlocking industrial and logistics leasing across new geographies. Massive investments in highways, dedicated freight corridors, ports, and multimodal logistics parks are reducing transit time and costs, making previously peripheral locations commercially viable. The PM Gati Shakti National Master Plan, in particular, aims to integrate (India) infrastructure planning across ministries, ensuring seamless movement of goods. As connectivity improves, developers and occupiers are increasingly exploring Tier-II and Tier-III cities, which offer lower land costs and untapped labour pools Another important factor behind the record.
Translated InTo Higher Demand
Leasing levels is India’s rising attractiveness as a global supply chain alternative. Geopolitical shifts and the need for supply chain diversification have prompted multinational corporations to adopt a “China+1” strategy, with India emerging as a preferred destination. This has translated into higher demand for large industrial parks, export-oriented warehouses, and build-to-suit facilities that meet international standards. According to Invest India, the country has seen a steady rise in foreign direct investment across manufacturing and logistics segments, reinforcing long-term confidence in India’s industrial real estate
The institutionalisation of the industrial and logistics real estate sector has also supported sustained growth. Increased participation by global investors, real estate investment trusts (REITs), and private equity funds has brought in not just capital but also best practices in design, sustainability, and asset management. Modern logistics parks now focus on energy efficiency, safety standards, and scalability, making them attractive to large occupiers with long-term expansion plans. Industry data published by IBEF highlights how warehousing demand has evolved from basic storage facilities to sophisticated logistics infrastructure aligned with global benchmarks.
Additionally Implementation
Policy stability and regulatory clarity have further enhanced market confidence. Reforms related to land acquisition, single-window clearances, and digital approvals are gradually reducing project timelines and compliance complexity. Additionally, the implementation of GST has transformed India into a single market, eliminating inter-state barriers and encouraging companies to consolidate warehouses into fewer, larger hubs. This structural change continues to drive leasing demand as firms optimise their logistics networks for efficiency and scale. Policy-level perspectives on these reforms are regularly outlined by NITI Aayog which emphasises.
Logistics efficiency as a key driver of India’s economic competitiveness the outlook for India’s industrial and logistics leasing remains robust. Rising consumption, urbanisation, and export-oriented manufacturing are expected to sustain demand over the medium to long term. Emerging sectors such as electric vehicles, renewable energy equipment, and electronics manufacturing are (India) likely to create new pockets of industrial activity, further diversifying leasing demand. As developers respond with innovative formats like multi-storey warehouses and integrated industrial townships, the sector is poised to evolve beyond traditional models.
Q1. Why is industrial and logistics leasing growing rapidly in India?
The surge is driven by manufacturing expansion, e-commerce demand, infrastructure upgrades, and supportive government policies.
Q2. Which cities are leading industrial leasing activity?
Delhi-NCR, Mumbai, Pune, Chennai, Bengaluru, Hyderabad, and Ahmedabad dominate leasing volumes.
Q3. How does e-commerce impact warehouse demand?
E-commerce requires large, modern warehouses near consumption hubs, boosting Grade-A leasing.
Q4. What role do government policies play?
Initiatives like Make in India, Gati Shakti, and PLI schemes are attracting large industrial investments.
Q5. Is this growth sustainable long-term?
Yes, due to structural changes in supply chains, rising consumption, and global manufacturing shifts toward India.
