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India's Warehousing Boom: How 11% Growth Reveals a Manufacturing Revolution

India's industrial and warehousing market is showing impressive resilience. Demand jumped 11% in the first three quarters of 2025, largely thanks to logistics and e-commerce companies. This growth is spreading beyond major cities, fueled by new infrastructure and government initiatives. The future looks bright for high-tech, sustainable warehouses and alternative assets like data centers.

Key Points: India Industrial Warehousing Demand Grows 11% in 2025

  • Demand reached 26.5 million sq ft in nine months, led by third-party logistics players
  • E-commerce and engineering firms also showed a significant surge in leasing activity
  • Growth is supported by major infrastructure projects like dedicated freight corridors
  • Demand for ESG-compliant, high-tech Grade A warehouses is set to rise sharply by 2030
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India's industrial and warehousing demand grows 11 pc in 9 months of 2025

India's industrial & warehousing demand surged 11% in 2025, driven by 3PL and e-commerce. Growth fueled by policy support and expansion into Tier 2/3 cities.

"With developers adopting global standards in design, sustainability, and automation, the segment is expected to draw deeper institutional capital - Colliers Report"

New Delhi, Dec 16

India’s industrial and warehousing market remained resilient in 2025, with cumulative demand across the top eight markets reaching 26.5 million square feet in the first nine months of the year, reflecting an 11 per cent year‑on‑year increase, a report said on Tuesday.

The report from Colliers said that annual demand could reach 30-–40 million sq ft, with new supply likely to remain elevated at 35–40 million sq ft in 2025.

Third‑party logistics (3PL) players continued to dominate leasing activity, accounting for nearly one‑third of warehousing demand, while e‑commerce and engineering firms also saw surge in demand.

Colliers forecasts that policy support and modernisation will drive growth in 2026 for emerging markets as 3PLs accelerate Grade A demand across tier I cities and emerging hubs.

Further, the report said that rising traction in Tier 2 and 3 cities will be supported by enhanced regional connectivity through expressways, dedicated freight corridors, industrial corridors, and upcoming Multi-Modal Logistics Parks (MMLPs).

Strong policy push and better implementation of flagship programs such as Make in India, the Production-Linked Incentives (PLI) scheme, and Gati Shakti masterplan, are likely to accelerate India’s transformation into a competitive manufacturing hub.

The real estate services firm said that demand for ESG compliant and technology adept Grade A warehouses and logistics parks is set to rise in 2030.

“With developers adopting global standards in design, sustainability, and automation, the segment is expected to draw deeper institutional capital and accelerate the inclusion of premium warehouses in future REITs/InvITs,” it said.

In alternative asset classes, Data Centers (DC) capacity has scaled to over 1,300 MW capacity with a real estate footprint of nearly 16 million sq ft across top seven markets.

This growth is driven by surging demand for cloud and digital services, accelerated adoption of AI and IoT, deeper internet penetration, regulatory push and stricter data localization norms.

Alternative asset classes such as data centers, senior living, and co-living are poised for sustained momentum in 2026 as investors seek diversification and enhanced risk-adjusted returns, the report noted.

- IANS

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Reader Comments

P
Priya S
Great to see the focus on ESG and Grade A warehouses. As someone in logistics, the shift towards automation and sustainability is not just a trend, it's a necessity for global competitiveness. Hope this translates to more skilled jobs on the ground.
R
Rohit P
The data center growth is mind-blowing! 1300 MW capacity is huge. With AI and digital services booming, we need this infrastructure. But I hope the environmental impact of these power-hungry facilities is managed properly. Growth must be sustainable.
S
Sarah B
While the numbers look impressive, I hope this industrial growth is inclusive. Reports often highlight top cities and institutional investment. What about the small and medium enterprises? Are they getting access to these modern warehouses and benefits?
V
Vikram M
The expansion to emerging hubs is the real story here. When cities like Indore, Coimbatore, or Lucknow get better warehousing, it reduces logistics costs for everyone and decongests the metros. Gati Shakti in action! 🚚
K
Karthik V
As an engineer, the surge in demand from the engineering sector mentioned is very encouraging. It signals robust capital expenditure and project activity. This foundational growth is what builds long-term economic strength, not just consumption.

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