India’s Industrial & Logistics Sector Records Strongest Q3 Absorption at 21.7% YoY

06 Oct 2025 CW Team

India’s industrial and logistics sector posted its strongest quarter ever in Q3 2025, with gross absorption rising 21.7 per cent Y-o-Y to 21.3 million sq ft, according to Savills India. Cumulative absorption for the first nine months reached 55.3 million sq ft, up 23.4 per cent Y-o-Y, driven by manufacturing expansion and steady demand from 3PL and e-commerce players.

New completions grew 11.9 per cent Y-o-Y to 21.6 million sq ft in Q3 2025, bringing cumulative supply for 9M 2025 to 55.0 million sq ft (+15.8 per cent Y-o-Y). Tier-I cities contributed 84 per cent of absorption, while Tier-II and III markets accounted for 16 per cent, reflecting growing industrial activity in emerging hubs.

Srinivas N, Managing Director, Industrial & Logistics, Savills India, said: “India’s industrial and warehousing sector is entering a defining phase. Expansion of manufacturing, rising demand for Grade-A distribution facilities, and the growth of Tier-II/III cities are repositioning India as a global industrial and distribution destination.”

Grade-A facilities dominated, contributing 52 per cent of absorption. Manufacturing emerged as the fastest-growing segment, increasing its share to 27 per cent from 16 per cent a year ago, while e-commerce grew to 10 per cent. Delhi-NCR led city-wise absorption with 21 per cent, followed by Mumbai and Pune at 15 per cent each.

Looking ahead, the sector is expected to surpass 70 million sq. ft. in supply and absorption in 2025, led by 3PL and manufacturing, alongside sustained retail, FMCG, and FMCD demand. Tier-II and III cities are emerging as key hubs, driven by e-commerce expansion and rising demand for quality Grade-A facilities.

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