India’s Logistics & Industrial Sector Hits Record Growth in H1 2025

Post by : Meena Rani

India’s logistics and industrial real estate sector has shown remarkable growth during the first half of 2025. Total leasing activity reached 30.7 million square feet (MSF), marking a 21.6% increase compared to H1 2024 and a 12.1% rise over the second half of 2024. This growth highlights the increasing demand for industrial and warehouse spaces as India’s manufacturing and supply chain activities expand.

Warehousing and Industrial Spaces Drive Growth

Warehousing has remained the main driver of this growth, contributing 21.9 MSF, which is 71.3% of the total leased space. Industrial spaces accounted for the remaining 28.7% (8.8 MSF). The high demand for warehouse space shows that companies are continuing to invest heavily in storage and logistics infrastructure to support faster deliveries and efficient supply chains.

The Engineering & Manufacturing (E&M) sector led the leasing activity with 9.7 MSF, capturing 32% of total absorption, and showing a 37% increase compared to last year. This strong performance reflects the growing confidence of manufacturing companies in expanding their operations across India.

Third-Party Logistics (3PL) operators also contributed significantly, leasing 7.4 MSF, which is about 24% of the total market. This segment has stabilized after rapid expansion in recent years, showing maturity and steady growth.

Meanwhile, the E-commerce sector recorded the highest annual growth, with leasing jumping 158% year-on-year to 4.6 MSF, making up 15% of total leasing. The rise is driven by companies expanding their warehouse networks to handle festive season demand, last-mile delivery, and faster fulfillment.

Regional Highlights

Looking at city-wise performance, Mumbai led in leasing activity with 7.0 MSF, representing 23% of the total leasing. Mumbai also posted an impressive 131% year-on-year growth, fueled by strong demand from both warehousing and industrial sectors.

Ahmedabad, although smaller in total volume at 1.7 MSF, showed the highest growth rate, soaring 192% year-on-year, and now represents 5.4% of total leasing. This indicates Ahmedabad’s rising importance as a key logistics and industrial hub in India.

Outlook for the Rest of 2025

The strong performance in H1 2025 demonstrates that India’s logistics and industrial sector has solid fundamentals. Leasing activity has surpassed 50 MSF annually for the past three years. If this momentum continues, the sector is expected to cross 60 MSF by the end of 2025, setting a new record for industrial and logistics growth in the country.

Moreover, India’s pipeline of Grade-A warehousing space is expected to grow by 25 MSF over the next 2-3 years, supported by favorable government policies and strong market demand. This will ensure that the logistics and industrial real estate sector continues its upward trend, attracting more investments and supporting the growth of manufacturing, supply chain, and e-commerce businesses across India.

India logistics, industrial leasing, warehousing demand, manufacturing growth