India Rising as a Decentralized Manufacturing Hub

The growth of the manufacturing sector, spearheaded by the automotive, energy, and chemical industries, indicates India's increasing significance as a decentralized manufacturing center. Major players such as Apple, Samsung, and Foxconn have broadened their operations, playing a role in this change. Analysts pointed out that this shift highlights the transformation of India's warehousing sector, moving from a 3PL-focused model to a varied ecosystem.

In the meantime, the retail and e-commerce industries have achieved considerable progress, with transaction volumes increasing by 35% and 34% year over year, respectively. Their joint market share currently surpasses 20%, indicating an expanding occupant base.

Although there was a small decline in market share, the 3PL sector experienced a year-over-year rise in transaction volume, highlighting ongoing demand. Experts suggest that a well-rounded expansion among sectors, along with constrained supply, has maintained vacancy rates at a robust 10.3% as of Q3 2024.

Mumbai, with a total warehousing space of 479 million sq. ft across eight cities, continues to be the largest market, accounting for 31% of the stock, while the NCR follows with 21%. This sectoral shift, alongside steady demand, suggests a favorable outlook for Indian warehousing in the years ahead. The vacancy rate in the Bengaluru market stands at 18.9%, leading the way, with Hyderabad and the NCR trailing at 14.6% and 14.5% respectively.

India's warehousing scene is undergoing a notable transformation, as the manufacturing industry eclipses 3PL in leasing volumes, fueled by key sectors such as automotive and energy. This change, coupled with significant expansion in retail and online shopping, indicates a varied market. Given the robust demand and a healthy vacancy rate of 10.3%, the outlook for Indian warehousing appears optimistic and stable.