Thursday, 18 June 2026
India’s logistics and warehousing sector has moved well beyond its post-pandemic recovery phase and is now benefiting from a broader set of structural growth drivers. Demand from third-party logistics providers, e-commerce operators, manufacturers and retailers continues to support leasing activity across major logistics markets, while improving infrastructure and supply-chain modernisation are helping sustain long-term expansion.
The defining characteristic of the current cycle is the diversity of occupier demand. Unlike previous periods when activity was concentrated within a limited number of sectors, today’s market benefits from contributions across logistics, manufacturing, retail, engineering, automotive and e-commerce businesses. This broader demand base has strengthened market resilience and supported continued investment in warehouse development.
Third-party logistics providers remain the largest source of occupier demand. As retailers and manufacturers increasingly outsource transportation, inventory management and fulfilment functions, 3PL companies continue to expand their warehouse footprints across the country. Their role has become increasingly important as businesses seek more efficient and scalable supply-chain solutions while extending distribution networks into new markets.
E-commerce remains another significant demand driver. While the pace of expansion varies between operators and market cycles, the long-term growth trajectory remains positive. Consumers continue to embrace online shopping, while quick-commerce platforms are creating additional requirements for urban fulfilment centres and last-mile distribution facilities. Expansion beyond major metropolitan areas into Tier-2 and Tier-3 cities is also increasing demand for regional warehousing networks.
Manufacturing activity is contributing to the sector’s growth as well. Production-linked incentive schemes, supply-chain diversification and rising industrial investment are creating additional requirements for storage, distribution and logistics infrastructure. Companies involved in engineering, electronics, automotive and industrial production are increasingly seeking modern facilities capable of supporting more sophisticated supply chains.
A significant portion of demand is now focused on Grade A warehousing. Occupiers increasingly prioritise facilities that offer higher operational efficiency, advanced specifications, automation readiness, sustainability features and strong connectivity. Institutional-grade logistics parks have therefore become the preferred choice for many large occupiers, particularly multinational companies and organised logistics operators.
Rental growth has reflected these changing preferences. Prime logistics corridors across markets such as Mumbai, Delhi-NCR, Bengaluru, Pune, Chennai and Hyderabad have generally experienced rental increases as demand for high-quality space has remained strong. Market estimates suggest that rents in many established logistics hubs increased by between 5% and 10% during 2025, although performance varied by location and asset quality.
The strongest rental growth has been concentrated in institutional-grade developments and strategically located logistics parks with excellent transportation access. Secondary locations and older warehouse stock have generally experienced more moderate growth, reflecting occupier preference for modern facilities that can support increasingly complex supply-chain operations.
Infrastructure development continues to provide a strong foundation for future growth. Initiatives such as the Dedicated Freight Corridor programme, PM Gati Shakti, multimodal logistics parks and new expressway networks are improving connectivity and reducing transportation costs. These investments are helping unlock new logistics locations while strengthening existing industrial corridors.
The long-term outlook remains positive. Rising domestic consumption, expanding manufacturing activity, continued e-commerce growth and ongoing supply-chain modernisation are expected to support demand for logistics space over the coming years. While challenges remain, including land acquisition, infrastructure gaps in certain regions and the need for additional Grade A supply, the sector continues to benefit from powerful structural drivers.
As India’s economy expands and supply chains become increasingly sophisticated, logistics and warehousing are likely to remain among the strongest-performing segments of the country’s real estate market, supported by diverse occupier demand and sustained rental growth in key locations.
Source: CIJ.World India Research & Analysis Team
