India’s industrial and logistics sector continued its growth momentum in 2026, with absorption hitting 34.8 million square feet in the first half of the year, representing a 2.4% year-on-year increase, as per a report by Savills India. The demand was mainly fueled by manufacturing (30%) and third-party logistics (23%) occupiers.
Furthermore, sustained demand was seen from FMCG and FMCD (18%), as well as e-commerce (10%) segments, indicating a widespread growth trend across key sectors. Tier 1 cities remained dominant, accounting for 78% of total absorption, while Tier 2 and 3 markets contributed 22%, according to the report.
Srinivas N, Managing Director of Industrial and Logistics at Savills India, highlighted that India’s manufacturing landscape is swiftly transforming into a globally integrated ‘Made for India and the World’ platform. This evolution, supported by proactive trade agreements and increased investments, is fostering robust demand for industrial and logistics real estate.
The market saw a fresh supply of 42.7 million sq. ft., with Tier-I cities making up 86% of the total supply at 36.7 million sq. ft. Tier 2 and 3 cities contributed 6 million sq. ft., or 14% of the total supply. The report also noted that the market witnessed project deliveries across cities in line with the growing demand.
Demand for Grade-A space has notably strengthened in recent years, driven by a growing emphasis on quality, compliance, and evolving ESG requirements. Grade-A absorption surged to 59% in H1 2026, up from 55% in H1 2025, the report highlighted. Delhi-NCR led the absorption at nearly 20%, followed by Pune and Mumbai at 17% and 16% respectively.
