How Did Manufacturing Drive India’s 16% Warehousing Growth in July-September?
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Synopsis
In the July-September period of 2025, India's warehousing sector recorded a significant 16% growth, driven primarily by the manufacturing industry. With robust leasing activity and an increase in demand for Grade A facilities, the sector is poised for a record-breaking year, reflecting a shift towards high-quality infrastructure.
Key Takeaways
- Manufacturing sector drove 16% growth in Q3 2025.
- Leasing activity reached 49.2 million sq ft YTD.
- Grade A facilities accounted for 61% of leased space.
- E-commerce sector saw 137% YoY growth in leasing.
- Positive rent growth supported by strong occupier activity.
Mumbai, Nov 6 (NationPress) The manufacturing sector has been the key driver behind India's warehousing growth during the July-September period (Q3 2025), with an impressive 16% year-on-year increase, totaling 17.1 million square feet, as revealed in a recent report.
As demand remains strong, the year-to-date (YTD) leasing activity has surged to 49.2 million square feet, marking a 32% increase compared to the previous year, positioning the sector for yet another record-breaking year, according to Knight Frank India, a prominent international property consultancy.
In Q3 2025, manufacturing occupiers (excluding FMCG and FMCD) emerged as the largest demand contributor, accounting for 44% of total transactions and 45% YTD. This sector experienced a remarkable 56% YoY growth in volume during the first nine months of 2025.
The report emphasizes the ongoing momentum from manufacturing, third-party logistics (3PL), and e-commerce players, bolstered by robust domestic demand, supply chain diversification, and policy-driven industrial growth.
Grade A facilities continue to be the preferred choice, representing 61% of leased space in 2025, up from 58% last year, as noted in the report.
India’s industrial and warehousing sector is gaining strength due to fundamental changes, particularly in manufacturing growth, supply chain diversification, and enhanced logistics efficiency, stated Shishir Baijal, Chairman and Managing Director of Knight Frank India.
The demand landscape is diverse, with leasing activity maintaining its upward trend and Grade A facilities now comprising 61% of YTD occupier take-up, signifying a clear shift towards global-standard infrastructure.
“With robust business sentiment and ongoing policy support, the sector is well-positioned for sustainable, high-quality growth,” Baijal commented.
The e-commerce sector has experienced a significant revival, leasing 2.5 million square feet in Q3 2025, reflecting a staggering 137% YoY growth, the highest quarterly volume since early 2023.
Rent growth remains positive across various markets, fueled by strong occupier activity, especially from the manufacturing sector.
The outlook for manufacturing is promising, as companies continue to diversify supply chains and relocate production to India, supported by consistent governmental incentives, as per the report.
Point of View
The sustained growth in India's warehousing sector, primarily led by manufacturing, highlights the resilience of the economy. As companies adapt to changing market conditions and diversify their supply chains, the ongoing expansion of logistics and warehousing facilities is essential for supporting future growth. Knight Frank's report underscores the importance of strategic policy support and infrastructure development to maintain this momentum.
NationPress
06/11/2025
Frequently Asked Questions
What contributed to the 16% growth in warehousing in Q3 2025?
The growth was primarily driven by the manufacturing sector, which accounted for a significant portion of leasing activity during this period, supported by strong domestic demand and policy-driven industrial expansion.
How does the demand for Grade A facilities impact the warehousing sector?
The increasing preference for Grade A facilities, which accounted for 61% of leased space, reflects a shift toward global-standard infrastructure, enhancing operational efficiency and attracting more occupiers.
What role does e-commerce play in the warehousing market?
The e-commerce sector has shown a robust revival, contributing significantly to leasing activity with a 137% YoY increase, indicating its vital role in driving demand for warehousing space.
What is the outlook for the manufacturing sector in India?
The outlook remains strong as manufacturers continue to diversify their supply chains and relocate production to India, supported by consistent government incentives and a focus on increasing logistics efficiency.
How does the current economic climate affect warehousing growth?
The overall economic sentiment, bolstered by supportive policies and increasing occupier activity, positions the warehousing sector for long-term, sustainable growth.
