India’s warehousing and logistics sector has marked a significant milestone in 2024, recording a substantial $1.96 billion in investments. This performance reflects an impressive 203 per cent year-on-year surge in investment inflows, underscoring the sector’s rapid growth and its rising importance within the Indian economy. These investments now account for 29 per cent of the total institutional investments in real estate for the year, according to a report released by an industry expert.The logistics sector’s growth is largely driven by the increasing demand for warehouses, particularly in light of the burgeoning quick commerce industry.
With e-commerce platforms expanding rapidly across the country, the need for robust and efficient logistics solutions has skyrocketed, resulting in a record absorption of warehouse space. In 2024, 44.9 million square feet (sq ft) of warehousing space was absorbed across the country, a 19 per cent increase from the previous year. This demand has been propelled by shifts in consumer habits, with quick commerce players needing faster delivery times and more accessible storage spaces to meet customer expectations.
The second half of 2024 alone witnessed the absorption of 28.3 million sq ft, marking a 70 per cent increase from the first half of the year. This spike is the highest recorded in a single calendar year, reflecting not only the robust growth of the sector but also the impact of enhanced supply chain efficiency and infrastructure development.One of the key reasons behind this exponential growth is the positive investor sentiment fostered by ongoing governmental initiatives, including the Union Budget 2025-26, which continues to prioritise the logistics sector. Experts suggest that the expansion of infrastructure projects at both the central and state levels will bolster the growth trajectory of the sector, positioning India as an emerging global logistics hub.Among the major stakeholders in the sector, third-party logistics (3PL) companies have dominated the absorption rates, occupying a significant 33 per cent of the total warehousing space in India in 2024. These 3PL companies are capitalising on the increasing outsourcing of supply chain functions by businesses looking for greater efficiency and lower operational costs.
Furthermore, the engineering and manufacturing sectors have strengthened their presence, with their share of total absorption rising from 18 per cent in 2023 to 24 per cent in 2024. This uptick can be attributed to government-led incentives, such as the production-linked incentive (PLI) scheme, which encourages manufacturing in India under the ‘Make in India’ initiative.In terms of regional performance, Mumbai remains a dominant force in the warehousing space, with an absorption of 18.6 million sq ft in 2024. This represents an 82 per cent year-on-year growth, largely driven by enhanced connectivity, particularly with the development of the Navi Mumbai airport, which improves intercity logistics. Pune, however, saw the highest growth rate, with warehouse absorption jumping by 85 per cent. Other cities like Chennai, Hyderabad, and Kolkata have seen a slight decline in their share of absorption, now accounting for 15 per cent of total warehousing space taken up, down from 22 per cent in the previous year.The growing demand for warehouse space is also fostering greater sustainability within the logistics sector. Many companies are beginning to integrate green logistics practices by opting for eco-friendly transportation and storage solutions, contributing to the broader goals of reducing carbon emissions and promoting more sustainable industrial operations.Industry experts have pointed to the role of digitalisation as a crucial factor in driving sector growth. The increasing adoption of digital tools for inventory management, real-time shipment tracking, and data-driven decision-making is enabling companies to streamline their supply chains and reduce operational inefficiencies.
With logistics giants continuing to leverage technology for real-time visibility and automation, the sector is expected to remain a major contributor to India’s economic growth.As India’s warehousing and logistics sector continues to expand, the emphasis on creating a seamless, integrated, and sustainable logistics ecosystem will be critical in maintaining its competitive edge globally. With more investments, technological advancements, and government support, the sector is poised for continued success in the years to come.
