India’s warehousing sector is witnessing a sharp revival, with leasing volumes in the first quarter of 2025 soaring by 50 per cent year-on-year to touch 16.7 million square feet.
The growth is being led by a resurgent manufacturing base and a reinvigorated e-commerce sector, signalling strong investor confidence in the country’s expanding logistics backbone.The surge is particularly notable in the manufacturing segment, which alone accounted for 48 per cent of the total warehousing space leased between January and March 2025. This represents a near-doubling of activity compared to the same period last year, underscoring how India’s industrial policy and global supply chain reorientation are beginning to bear fruit.E-commerce players also stepped up their warehousing footprint, registering a 151 per cent rise in leasing activity.
Although the growth stems from a comparatively lower base, the spike indicates a renewed focus on distribution scale as online consumption accelerates, driven by digital retail penetration and improvements in freight and warehousing infrastructure.Despite these shifts, third-party logistics (3PL) firms posted a more moderate 12 per cent increase. However, their share in total transactions dipped to 23 per cent, revealing a broader trend of consolidation as core manufacturers and e-commerce platforms internalise logistics functions to improve cost and time efficiencies.Mumbai led all metros with a 27 per cent share of transacted space, clocking 4.4 million square feet. Pune, Chennai, and the National Capital Region (NCR) followed closely, each contributing between 16 and 17 per cent. Manufacturing firms drove the momentum in Pune and Chennai, while NCR continued to be dominated by 3PL-led activity.
Among the emerging regional hubs, Chennai and Hyderabad delivered exceptional performances, with leasing volume growth of 154 per cent and 137 per cent respectively. This jump points to the strategic realignment of supply chains and decentralisation of storage hubs beyond traditional clusters, aligning with India’s infrastructure upgrades and state-level policy pushes.The rising preference for high-quality, compliant spaces is also reflected in the fact that Grade A facilities made up 59 per cent of all leasing deals during the quarter. As global and domestic firms seek to align with international warehousing and ESG standards, demand for energy-efficient, structurally resilient, and digitally integrated facilities continues to mount.
India’s logistics transformation is further being catalysed by the country’s positioning under the China-plus-one strategy. This shift, combined with initiatives such as ‘Make in India’ and the National Logistics Policy, is helping position the country as a key regional industrial and warehousing hub.With infrastructure upgrades gathering pace and state governments encouraging sustainable logistics ecosystems, the warehousing industry appears well-placed to support India’s transition towards smarter, cleaner, and more efficient cities. The outlook remains optimistic as sectors scale up operations and the demand for last-mile, tech-enabled warehousing continues to grow.
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