Strong Industrial Demand Drives Warehousing Growth in India to Three-Year High
Indias warehousing sector experiences record growth in 2026, reaching three-year highs due to robust industrial demand and logistics activity.
New Delhi, November 3 (Daily Kiran) : India’s warehousing and logistics sector has achieved record performance in 2026, driven by robust industrial demand and a surge in logistics activities. According to a recent report, the country saw an absorption of 10.58 million square feet of warehouse space during the July-September quarter of 2026. This brought the total absorption for the first nine months of 2026 to 32.6 million square feet, marking the highest level in three years.
The report from Westian highlighted that despite global geopolitical uncertainties and broader economic challenges, demand in the warehousing sector remained strong. Leasing activity increased by 0.2 percent quarter-over-quarter and by 15 percent year-over-year.
During the third quarter of 2026, the sector attracted institutional investments totaling $332 million, accounting for 17 percent of the total quarterly investment. This represents the highest level for any quarter in the past two years.
Shreenivas Rao, CEO of Westian, noted that India’s warehousing and logistics sector is evolving beyond traditional demand sources. There is a growing participation from third-party logistics (3PL), manufacturing, engineering, and automotive sectors. He emphasized that sustained demand, improvements in infrastructure, and supportive government policies are bolstering the long-term prospects of the sector.
The report indicated that rising consumption, an expansion in manufacturing activities, and the increasing need for modern logistics facilities are attracting investors. This trend has led to a strong interest in modern, technology-based warehousing assets.
In terms of sectoral share, the 3PL segment remained the largest leasing segment in the third quarter, although its share dropped from 41 percent in the previous quarter to 29 percent. The engineering and manufacturing sector accounted for 23 percent, while the automotive and auto components sector represented 14 percent.
Chennai emerged as the top performer among cities, with leasing of 2.89 million square feet, reflecting a staggering 320 percent increase quarter-over-quarter and a 156 percent increase year-over-year. Mumbai followed in second place with 2.70 million square feet leased, although it experienced a decline of 46 percent quarter-over-quarter and 37 percent year-over-year. Pune secured third place with an absorption of 2.2 million square feet, showcasing an impressive 245 percent year-over-year growth.
The report concluded that the ongoing demand from various industrial sectors is expected to further enhance the use of modern, technology-enabled warehousing facilities. This trend will likely benefit established logistics hubs as well as emerging warehousing centers.
