Warehousing – India’s storage sector expands as premium facilities dominate supply
Warehousing – India’s organised warehousing capacity expanded significantly in 2025, reaching nearly 610 million square feet, according to a recent industry assessment. A substantial share of this space now falls under high-quality Grade A facilities, reflecting a shift towards modern storage standards. The expansion highlights the country’s strengthening supply chain infrastructure as businesses demand advanced and reliable storage solutions to support growing consumption and trade activities.
Institutional Investments Elevate Quality Standards
The report noted that institutional investments are playing a crucial role in reshaping India’s warehousing landscape. Approximately 38 percent of the country’s premium storage space is now backed by institutional developers, contributing to improved construction quality, standardised infrastructure, and enhanced operational features. These developments are also attracting multinational companies seeking reliable logistics networks and compliance with global storage specifications. The increased presence of professional investors is expected to drive transparency and long-term stability in the sector.
Logistics and E-commerce Continue to Drive Demand
Third-party logistics providers and online retail companies remain the primary drivers of warehousing demand across the country. With the rapid expansion of digital commerce and the growing need for faster delivery timelines, companies are increasingly investing in large-scale storage facilities. In addition, demand from light manufacturing industries is also gaining traction. Sectors such as automobile components, engineering goods, and electronics manufacturing are gradually expanding their storage requirements, indicating diversification in the types of occupiers utilising warehouse space.
Metro Cities Maintain Dominance but Secondary Markets Grow
India’s eight largest metropolitan markets continue to dominate warehousing supply, accounting for nearly 82 percent of the total stock, equivalent to approximately 498 million square feet. However, smaller cities are steadily gaining prominence as consumption patterns evolve. Fourteen emerging urban centres collectively account for 112 million square feet of storage space, demonstrating growing investor and occupier interest in expanding operations beyond traditional logistics hubs.
Industry experts highlighted that several tier 2 cities are witnessing strong demand due to improving infrastructure, increasing consumer markets, and favourable operational costs. Cities such as Lucknow and Kochi have each recorded annual absorption of more than one million square feet, reflecting expanding distribution networks and stronger regional demand.
Automation Expected to Transform Storage Operations
Technological adoption is expected to play a major role in the future of India’s warehousing sector. Automation within storage facilities is projected to increase significantly over the next five years. Industry estimates suggest that automation integration, which currently accounts for a relatively small share of operations, could rise to nearly 75 percent by 2030. Automated systems are likely to improve inventory accuracy, reduce operational costs, and enhance delivery efficiency, making warehouses central components of advanced supply chain ecosystems.
Expanding Capacity and Nationwide Distribution Networks
In 2025, tier 1 cities recorded a net absorption of around 55 million square feet of warehousing space, highlighting sustained demand from established logistics hubs. Meanwhile, tier 2 cities absorbed approximately 12 million square feet, signalling growing interest from companies seeking to optimise supply chains by expanding closer to regional markets. This expansion is expected to reduce distribution timelines and support last-mile delivery operations.
The overall sector is projected to grow steadily, with industry forecasts suggesting that India’s warehousing capacity could reach nearly 850 million square feet by 2030. The anticipated expansion will likely be supported by geographic diversification, increased institutional funding, and the integration of advanced technologies. Industry observers believe that improved operational efficiency, environmental sustainability, and automation will become essential elements shaping the future of India’s logistics infrastructure.