Industrial and Warehousing Sector in India Sees 15.6% Growth in Q1 2026
Synopsis
In Q1 2026, India's industrial and warehousing sector achieved remarkable growth, with an absorption of 18.5 million square feet. This signifies a 15.6% year-on-year increase, primarily driven by the manufacturing segment and strong performances from key cities like Pune.
Key Takeaways
Absorption reached 18.5 million square feet in Q1 2026.
15.6% year-on-year growth in the industrial and warehousing sector.
Manufacturing sector contributed 35% to total absorption.
Pune accounted for 24% of total absorption.
Grade-A space increased to 60% of absorption.
Projected total absorption to exceed 75 million square feet by 2026.
New Delhi, April 1 (NationPress) In the first quarter of 2026, India’s industrial and warehousing sector demonstrated impressive growth by achieving an absorption rate of 18.5 million square feet, reflecting a solid 15.6 percent year-on-year increase, according to a report released on Wednesday.
The findings from Savills India indicated that the manufacturing sector was the primary driver of this growth, with Pune emerging as a significant player, now ranking as the second-largest contributor to total absorption.
The manufacturing sector alone represented 35 percent of the absorption (approximately 6.5 million square feet), a rise from 30 percent in the previous year. Following this, the third-party logistics (3PL) sector contributed 23 percent, while the fast-moving consumer goods (FMCG) and fast-moving consumer durables (FMCD) sectors accounted for 14 percent.
Furthermore, Grade-A spaces have become increasingly important, with their share of absorption climbing to 60 percent from 51 percent in Q1 2025. This shift highlights occupiers' growing focus on quality, compliance, and environmental, social, and governance (ESG) criteria, as noted in the report.
In terms of geographical distribution, Tier-I cities represented 79 percent of total absorption, while Tier-II and Tier-III cities collectively maintained a substantial contribution of 21 percent. These cities also provided 16 percent of the overall supply during this quarter.
Pune alone accounted for 4.5 million square feet or 24 percent of the total absorption, while Delhi-NCR and Mumbai contributed 19 percent and 12 percent, respectively.
Despite ongoing uncertainties in West Asia, India’s industrial and logistics real estate sector remains robust and resilient.
With occupiers increasingly diversifying their supply chains and absorption rising, the total absorption is projected to exceed 75 million square feet by the end of 2026, as forecasted in the report.
On the supply side, the sector delivered 22.1 million square feet in Q1 2026, marking a 39 percent year-on-year increase. Tier-I cities provided 18.6 million square feet (representing 84 percent of total supply), while Tier-II and Tier-III cities contributed 3.4 million square feet or 16 percent.
Delhi-NCR led the supply contributions with 20 percent in Q1 2026, followed closely by Pune at 18 percent and Chennai at 17 percent, while Tier-II and Tier-III cities together accounted for 16 percent of the overall supply.
Point of View
The growth in India's industrial and warehousing sector is a promising indicator of economic resilience. The manufacturing sector's significant contribution, along with the rise of Tier-II cities, reflects a strategic shift in supply chain dynamics and real estate investment, positioning India for robust growth in the coming years.
NationPress
20 Jun 2026
Frequently Asked Questions
What is the absorption rate of India's industrial sector in Q1 2026?
India's industrial sector recorded an absorption rate of 18.5 million square feet in Q1 2026, marking a 15.6% increase year-on-year.
Which city contributed the most to industrial absorption?
Pune emerged as the second-largest contributor to overall absorption, accounting for 4.5 million square feet or 24% of the total.
What sectors are driving growth in India's industrial space?
The manufacturing sector is leading the growth, followed by third-party logistics (3PL) and FMCG/FMCD sectors.
How much Grade-A space was absorbed in Q1 2026?
Grade-A spaces accounted for 60% of the absorption in Q1 2026, reflecting a shift towards higher quality standards.
What is the projected total absorption by 2026?
The total absorption is expected to surpass 75 million square feet by the end of 2026.
