India’s manufacturing real estate sector is witnessing strong growth, with gross manufacturing leasing recording a cumulative 69 million sq ft since 2021, registering a 49% CAGR, according to JLL’s latest report, Great Places of Manufacturing in India (GPMI) 2.0: Advanced Manufacturing Clusters.

Manufacturing has emerged as the second-largest occupier segment in India’s industrial real estate market after third-party logistics (3PL). Gross absorption touched 19.2 million sq ft in 2025, while the first half of 2026 recorded 10.2 million sq ft, reflecting a 19% year-on-year growth.

Pune and Chennai continue to lead manufacturing leasing activity, followed by NCR-Delhi, Bengaluru, Mumbai, Ahmedabad and Hyderabad. Meanwhile, emerging markets such as Bhubaneswar, Nashik, Surat, Lucknow, Sambhajinagar, Coimbatore, Hosur and Bhopal are witnessing manufacturers increasingly opting for land transactions to enable greater customisation and long-term operational control.

Manufacturing leasing absorption, estimated at 24 million sq ft in 2026, is expected to reach 46 million sq ft by 2030. Grade A industrial properties dominate the segment with nearly 90% market share, driven by manufacturers’ preference for modern infrastructure, operational efficiency and faster project execution.

“The growth in manufacturing real estate reflects two distinct yet complementary strategies shaping India's industrial landscape. Tier-I cities are witnessing aggressive leasing of Grade-A facilities as manufacturers prioritise speed-to-market and capex-light models due to limited affordable land availability. At the same time, Tier-II markets are seeing manufacturers acquire land for greater flexibility and control,” said Yogesh Shevade, Managing Director, Industrial & Logistics, India, JLL.

The report highlights Production Linked Incentive (PLI) schemes and Free Trade Agreements (FTAs) as key drivers supporting India’s manufacturing expansion. Infrastructure readiness, ecosystem development and sustainability are also emerging as important differentiators for advanced manufacturing clusters.