3PL, manufacturing sectors drives high warehouse demand in India

15 Jun 2023 CW Team

Knight Frank, a property consultancy, published the India Warehousing Market Report – 2023, which attributed the surge in demand primarily to the third-party logistics (3PL), manufacturing, and retail sectors. Among these, the 3PL sector observed the highest rise in demand, marking a 34 per cent increase from the previous year. The manufacturing sector also saw significant growth, with a 23 per cent year-on-year (YoY) increase.

However, the e-commerce sector faced a decline in demand during FY23. This was mainly due to the capacity built in previous years to accommodate the surge in consumption during the pandemic, as well as a gradual shift towards flexibility. The report stated that the volume of transactions in the e-commerce sector experienced a 71 per cent YoY decline in FY23. However, this decline is expected to be temporary, as secondary activity is likely to revive once the excess capacity is utilised in the coming year.

The report highlighted that India has benefited from the ongoing trend of companies decentralising their manufacturing capacity from China. Apple, for example, now manufactures seven per cent of its iPhones in India, a significant increase from the meager one per cent in 2021. The report credited the government's "Make in India" initiative and the production-linked incentive (PLI) scheme for boosting the prospects of the manufacturing industry in the country.

While Mumbai and the National Capital Region (NCR) led the market in terms of overall transaction volumes in FY23, Bengaluru and Kolkata witnessed the highest growth in annual transacted volumes, with a 25 per cent and 18 per cent YoY increase, respectively. The growth in the warehousing market is not limited to the top eight cities but has extended to secondary markets as well, supported by improved infrastructure such as highways, railways, and air transportation. The report emphasised the emerging importance of 3PL providers and manufacturing companies as primary players in the industry.

However, the report also noted that inflation in the cement and steel sectors has led to an increase in warehouse rents. During FY23, the top eight cities in India experienced a rise in warehouse rent ranging from three to eight per cent, with Bengaluru witnessing the highest increase of eight per cent. NCR followed with a seven per cent rise, while Ahmedabad saw a five per cent increase.

A report revealed that the demand for warehouses in the top eight cities in India reached an unprecedented level of 51.3 million square feet (MSF) in the fiscal year 2022-23 (FY23). Mumbai, Bengaluru, and Kolkata witnessed an all-time high in demand. Overall, the country experienced a 24 per cent increase in demand compared to FY22.Knight Frank, a property consultancy, published the India Warehousing Market Report – 2023, which attributed the surge in demand primarily to the third-party logistics (3PL), manufacturing, and retail sectors. Among these, the 3PL sector observed the highest rise in demand, marking a 34 per cent increase from the previous year. The manufacturing sector also saw significant growth, with a 23 per cent year-on-year (YoY) increase.However, the e-commerce sector faced a decline in demand during FY23. This was mainly due to the capacity built in previous years to accommodate the surge in consumption during the pandemic, as well as a gradual shift towards flexibility. The report stated that the volume of transactions in the e-commerce sector experienced a 71 per cent YoY decline in FY23. However, this decline is expected to be temporary, as secondary activity is likely to revive once the excess capacity is utilised in the coming year.The report highlighted that India has benefited from the ongoing trend of companies decentralising their manufacturing capacity from China. Apple, for example, now manufactures seven per cent of its iPhones in India, a significant increase from the meager one per cent in 2021. The report credited the government's Make in India initiative and the production-linked incentive (PLI) scheme for boosting the prospects of the manufacturing industry in the country.While Mumbai and the National Capital Region (NCR) led the market in terms of overall transaction volumes in FY23, Bengaluru and Kolkata witnessed the highest growth in annual transacted volumes, with a 25 per cent and 18 per cent YoY increase, respectively. The growth in the warehousing market is not limited to the top eight cities but has extended to secondary markets as well, supported by improved infrastructure such as highways, railways, and air transportation. The report emphasised the emerging importance of 3PL providers and manufacturing companies as primary players in the industry.However, the report also noted that inflation in the cement and steel sectors has led to an increase in warehouse rents. During FY23, the top eight cities in India experienced a rise in warehouse rent ranging from three to eight per cent, with Bengaluru witnessing the highest increase of eight per cent. NCR followed with a seven per cent rise, while Ahmedabad saw a five per cent increase.

Infrastructure Energy

22 Oct 2025

KEC Secures Rs 10, 380 Mn Substation Order in Saudi Arabia

KEC International Ltd., a global infrastructure EPC major, and an RPG Group company, has secured a new order worth Rs 10,380 million for the Design, Supply and Installation of a 380 kV GIS Substation in Saudi Arabia.Vimal Kejriwal, MD & CEO, KEC International Ltd., commented, “We are delighted with the successive order wins in our T&D business. In a landmark achievement, we have secured our largest ever substation order. This prestigious order in the Middle East has widened our portfolio and strengthened our presence in the region. With this strategic win, our year-to-date or..

Infrastructure Urban

22 Oct 2025

Central Bank of India executes first fully digital SCF deal on PSB Xchange

In a major advancement for India’s banking sector, Central Bank of India (CBI) has successfully completed the country’s first fully digital supply chain finance (SCF) transaction on PSB Xchange—a unified multi-lender platform launched by PSB Alliance. PSB Xchange is designed to connect public and private sector banks, NBFCs, and fintechs with corporates and their channel partners to facilitate supply chain finance and small business loans. The transaction marks the first time a fintech-originated corporate lead has been seamlessly processed through the PSB Xchange ecosystem. The lead fl..

Infrastructure Energy

22 Oct 2025

Atlanta Electricals secures Rs 1,835 Mn transformer order from BNC Power

Atlanta Electricals Limited (“Atlanta”) has secured an order worth Rs 1,835 million from BNC Power Projects Ltd for the supply of extra high voltage (EHV) transformers and a bus reactor for its Pugal site. The contract includes a mix of 315 MVA, 400 KV and 100 MVA, 132 KV transformers along with a 400 KV bus reactor. The project scope encompasses design, manufacturing, testing, and supply to the project site. Deliveries will be sequenced following engineering and drawing approvals, offering multi-quarter execution visibility and ensuring a steady production run-rate. The order will be ex..