Did India’s industrial and logistics sector achieve an 18.6% absorption growth in 2025?
Synopsis
In a remarkable post-pandemic recovery, India's industrial and logistics sector achieved unprecedented absorption growth in 2025. Read on to discover how government policies and market dynamics are reshaping the landscape, paving the way for future expansion in this vital sector.
Key Takeaways
India's industrial and logistics sector achieved 76.5 million square feet in absorption in 2025.
Absorption growth rate of 18.6 percent year-on-year.
Manufacturing remains the primary demand driver with 29 percent share.
Delhi-NCR leads absorption with 17 percent .
Future projections indicate a surpassing of 80 million sq. ft. in 2026.
New Delhi, Dec 24 (NationPress) India’s industrial and logistics sector has maintained its robust post-pandemic growth path in 2025, achieving an all-time high annual absorption of 76.5 million square feet, reflecting an impressive 18.6 percent increase compared to the previous year, as reported on Wednesday.
Supported by proactive government initiatives, the manufacturing sector remains the primary demand driver, representing 22 million sq. ft. (29 percent) of the total absorption in 2025, a rise from 22 percent in 2024, according to data from the international real estate advisory firm, Savills India.
The third-party logistics (3PL) segment has shown sustained demand, contributing 28 percent overall, while FMCG and FMCD sectors accounted for 11 percent and retail contributed 6 percent. Additionally, the e-commerce sector has bounced back, with its contribution increasing from 4 percent in 2023 to 12 percent in 2025.
“India’s manufacturing landscape is undergoing a significant transformation, driven by the ongoing success of the ‘Make in India’ initiative, which has developed into a globally integrated ‘Made By India’ manufacturing platform. This shift indicates a strengthening of domestic production capabilities and India’s growing influence within international supply chains,” stated Srinivas N, Managing Director, Industrial and Logistics, Savills India.
Tier 1 cities accounted for 78 percent of total absorption, while tier 2 and 3 cities together comprised the remaining 22 percent. In terms of supply, tier 1 cities made up 82 percent of the total supply, with tier 2 and 3 cities contributing 18 percent, according to the report.
Delhi-NCR led the way with a remarkable 17 percent contribution to total absorption, followed by Pune and Mumbai at 15 percent and 14 percent, respectively.
The industrial and logistics sector is poised for a breakthrough year in 2026, with both supply and absorption projected to exceed 80 million sq. ft., highlighting the sector’s increasing structural demand.
Manufacturing, 3PL, and FMCG/FMCD occupiers are expected to remain the main growth drivers, propelled by supply-chain diversification, increasing consumption, and the expansion of organized logistics, as per the report.
Point of View
It is evident that India's industrial and logistics sector is witnessing a remarkable evolution. This growth signifies not only a recovery from the pandemic but also an opportunity for the nation to strengthen its position in global supply chains. With continuous support from government initiatives and increasing domestic capabilities, the future appears promising.
NationPress
8 May 2026
Frequently Asked Questions
What is the annual absorption growth rate for India's industrial sector in 2025?
The industrial sector in India recorded an 18.6 percent annual absorption growth rate in 2025.
Which segment is the strongest demand driver in 2025?
The manufacturing segment is the strongest demand driver, accounting for 29 percent of total absorption.
What contribution did the e-commerce sector make in 2025?
The e-commerce sector increased its contribution to 12 percent in 2025, up from 4 percent in 2023.
Which region accounted for the highest absorption?
Delhi-NCR accounted for the highest contribution at 17 percent of total absorption.
What is the forecast for the industrial sector in 2026?
The industrial sector is expected to see both supply and absorption surpass 80 million sq. ft. in 2026.
