India’s warehousing sector experienced a significant upsurge in 2024, driven by the expanding footprint of third-party logistics (3PL) providers and the rapid growth of the engineering and manufacturing (E&M) industry. As businesses adapted to evolving supply chain demands, these two sectors emerged as primary catalysts for the increasing absorption of storage and distribution spaces across the country. The trend reflects a broader transformation in logistics infrastructure, as companies seek to enhance efficiency and navigate challenges posed by fluctuating demand patterns and urban expansion.
The dominance of 3PL firms remained pronounced, accounting for 41% of total warehousing demand, underscoring their indispensable role in streamlining logistics for multiple industries. The E&M sector followed with an 18% share, a direct consequence of growing manufacturing activities and the establishment of distribution networks aimed at improving inventory management and reducing supply chain inefficiencies. Additionally, fast-moving consumer goods (FMCG) and e-commerce segments showed significant traction, each securing 9% of the total leasing activity. The surge in FMCG demand was fuelled by the rise of quick-commerce platforms catering to urban consumers’ expectations for rapid deliveries. Meanwhile, e-commerce enterprises bolstered their logistics capabilities, reinforcing their supply chains with advanced warehousing solutions to ensure seamless order fulfilment.
Among the key regions, Maharashtra maintained its position as the leading destination for industrial and logistics (I&L) investments, capturing 42% of the warehousing demand. The state’s well-established industrial framework, strategic connectivity, and proximity to major consumption hubs like Mumbai and Pune cemented its status as a logistics powerhouse. Tamil Nadu secured 19% of the demand, benefiting from its robust manufacturing clusters and port infrastructure, while Delhi-NCR recorded an equal share, leveraging its strategic location as a gateway to northern India’s commercial corridors. Karnataka and Telangana emerged as upcoming logistics hubs, collectively contributing to the country’s industrial growth as Bengaluru and Hyderabad attracted increasing investments from logistics and warehousing firms.
Investment patterns closely mirrored these regional trends, with Maharashtra, Delhi-NCR, and Karnataka securing half of the total private capital inflows into the I&L sector. Investors continue to prioritise locations that offer modern infrastructure, skilled labour pools, and proximity to expanding consumer markets. As the warehousing industry evolves, developers are also focusing on sustainability-driven practices, integrating green infrastructure and automation to enhance efficiency while reducing carbon footprints. This shift aligns with the broader objective of fostering an eco-friendly and technologically advanced logistics ecosystem.
Looking ahead to 2025, India’s warehousing demand is poised for sustained growth, though market saturation in 3PL-dominated regions may push service providers to explore alternative hubs. The E&M sector is expected to expand its distribution networks further, capitalising on advancements in manufacturing technology and automation. Similarly, FMCG players will continue investing in micro-fulfilment centres to meet the surging demand for instant deliveries. E-commerce firms are likely to strengthen their presence in tier-1 and tier-2 cities, enhancing last-mile delivery infrastructure to cater to the rapidly growing online shopping demographic. With Maharashtra, Tamil Nadu, and Delhi-NCR leading the way, emerging states like Telangana present new opportunities for warehousing expansion, as logistics firms balance growth potential with operational scalability in underdeveloped regions.
