India’s warehousing sector posted a sharp 42% year-on-year growth in leasing activity during the first half of 2025, totaling 32.1 million square feet across the top eight cities, according to a report by Knight Frank India published in The Economic Times.
The significant uptick was driven primarily by the manufacturing sector, which recorded a 71% YoY rise in space absorption, contributing 45% to the total leasing volumes. The report said this reflects India’s strengthening role as a global manufacturing destination amid ongoing supply chain realignments.
“The healthy surge in the volumes transacted in the industrial and warehousing market reflects the depth of India’s rapidly expanding manufacturing and consumption base,” said Shishir Baijal, chairman and managing director, Knight Frank India. “A 71% YoY rise in manufacturing-led activity highlights the shift towards India as a preferred production hub amid global realignments.”
Mumbai and Pune together accounted for 44% of the manufacturing sector’s leased space during the period. Key players such as SKS Fasteners, RenewSys India, Godrej & Boyce, and Lupin led major transactions in these markets. Manufacturing alone absorbed 14.6 million square feet in H1 2025, a steep increase from a year earlier.
The report also highlighted a growing preference for premium-grade assets. Grade A warehousing constituted 63% of total transacted space, up from 54% in H1 2024. Grade A assets also made up 75% of new supply during the period, with the total pan-India stock exceeding 500 million square feet.
The tightening of market supply was evident as the national vacancy rate declined to 12.1%, down from 13.1% last year, suggesting that supply struggled to keep up with robust demand.
Third-party logistics (3PL) companies absorbed 8.7 million square feet during the same period, accounting for 27% of the total leasing activity. This segment saw a 30% YoY increase, with Mumbai alone contributing 35% to the sector’s transacted volumes, followed by the National Capital Region (NCR) and Pune.
E-commerce firms, though no longer dominating the warehousing landscape, made a significant comeback by leasing 3.3 million square feet — up 61% from H1 2024. The sector now holds a 10% share in total activity.
Leasing activity grew in nearly all major cities, with the exception of Kolkata, which recorded no growth. Mumbai led the rankings with 7.5 million square feet leased, reflecting a 63% YoY surge. Pune and Chennai posted 76% and 135% increases, respectively. Ahmedabad reached a new half-yearly high with 3.6 million square feet, while Bengaluru registered a 72% YoY increase, driven heavily by manufacturing, which contributed 65% of the city’s leasing volume — the highest share since H1 2023.
Knight Frank’s report underscores the shift toward advanced infrastructure and quality-driven warehousing in India, reflecting both domestic consumption growth and global interest in the country’s industrial capacity.