How Much Did India’s Industrial and Warehousing Demand Rise in 2025?
Synopsis
India's industrial and warehousing market is booming, achieving an 11% growth in 2025. With demand reaching 26.5 million sq ft in nine months, this sector is positioned for accelerated growth driven by evolving logistics and policy enhancements.
Key Takeaways
India's industrial and warehousing demand increased by 11% in 2025.
Total demand reached 26.5 million square feet across eight markets.
3PL companies hold a significant share of warehousing demand.
Policy initiatives like Make in India are pivotal for growth.
Emerging cities are gaining traction through enhanced connectivity.
New Delhi, Dec 16 (NationPress) India’s industrial and warehousing sector displayed remarkable resilience in 2025, with total demand across the leading eight markets hitting 26.5 million square feet in the initial nine months, marking an 11% year-on-year growth, as reported on Tuesday.
The report by Colliers projected that annual demand could reach between 30 to 40 million sq ft, while new supply is expected to stay robust at 35 to 40 million sq ft throughout 2025.
Third-party logistics (3PL) companies continued to lead the leasing activity, representing nearly one-third of the warehousing demand, with significant increases observed from e-commerce and engineering sectors.
Colliers anticipates that ongoing policy support and modernization efforts will propel growth in 2026 for emerging markets, as 3PLs enhance Grade A demand in tier I cities and developing hubs.
Furthermore, the report highlighted the growing interest in Tier 2 and 3 cities, bolstered by improved regional connectivity via expressways, dedicated freight corridors, industrial corridors, and forthcoming Multi-Modal Logistics Parks (MMLPs).
A strong policy initiative and effective execution of flagship programs such as Make in India, the Production-Linked Incentives (PLI) scheme, and the Gati Shakti masterplan are set to expedite India’s evolution into a competitive manufacturing center.
The real estate services firm noted that the demand for ESG-compliant and technologically advanced Grade A warehouses and logistics parks is projected to increase by 2030.
“As developers embrace global standards in design, sustainability, and automation, the sector is likely to attract more institutional capital and facilitate the inclusion of premium warehouses in future REITs/InvITs,” it stated.
In the realm of alternative asset classes, Data Centers (DC) capacity has expanded to over 1,300 MW with a real estate footprint of nearly 16 million sq ft across the top seven markets.
This growth is fueled by rising demand for cloud and digital services, rapid adoption of AI and IoT, increased internet penetration, regulatory initiatives, and stricter data localization laws.
Alternative asset classes like data centers, senior living, and co-living are expected to maintain strong momentum in 2026 as investors seek diversification and improved risk-adjusted returns, according to the report.
Point of View
I believe that the growth in India’s industrial and warehousing sector is a testament to the country’s resilience and adaptability. This upward trend not only reflects the evolving market dynamics but also highlights the critical role of policy initiatives in fostering a competitive manufacturing environment. With continued investments and infrastructural enhancements, India's journey towards becoming a major logistics hub is promising.
NationPress
12 May 2026
Frequently Asked Questions
What is the current demand for industrial and warehousing space in India?
As of the first nine months of 2025, the demand for industrial and warehousing space in India reached 26.5 million square feet, reflecting an 11% year-on-year increase.
Which sectors are driving the demand for warehousing space?
The demand for warehousing space is primarily driven by third-party logistics (3PL) companies, along with significant contributions from e-commerce and engineering firms.
How is the growth of Tier 2 and 3 cities impacting the warehousing market?
The increasing traction in Tier 2 and 3 cities is supported by improved regional connectivity, which is expected to further enhance warehousing demand in these areas.
What is the expected future growth for the industrial sector in India?
Colliers forecasts that India's industrial sector could see annual demand reaching between 30 to 40 million square feet, underpinned by ongoing policy support and modernization efforts.
What role do alternative asset classes play in the market?
Alternative asset classes, such as data centers, senior living, and co-living, are anticipated to maintain momentum as investors seek diversification and better risk-adjusted returns.
