India's Warehousing Boom: A New Era of Logistics Transformation

The Indian warehousing sector is poised for unprecedented growth, with space demand projected to reach 1.2 billion sq. ft by 2027. This surge is driven by e-commerce and 3PL needs, shifting towards high-quality Grade A warehouses and broader geographic expansion, especially in Tier II and III cities.

India's warehousing sector is on the cusp of a substantial expansion, with demand for space projected to soar to 1.2 billion square feet by 2027, a report by JLL India and Miebach Consulting reveals. The growth encompasses various grades of warehouses across all cities, responding to evolving supply chain demands.

This upsurge signifies not just an increase in quantity but also a qualitative enhancement, particularly in high-grade facilities. Grade A warehouses are anticipated to expand significantly, from 290 million square feet in 2023 to 400 million square feet by 2027. The burgeoning sectors of e-commerce, Third-Party Logistics (3PL), and omni-channel retail are catalyzing this trend, driving the need for superior infrastructure beyond Tier I urban centers.

According to the report, Tier II and III cities saw a 41 percent rise in warehouse space absorption between 2022 and 2023. Industry insights from Sanjay Bajaj, Senior Managing Director of Logistics & Industrial at JLL India, highlight a shift towards Environmental, Social, and Governance compliance and adherence to the National Logistics Policy's goal to cut logistics costs to 10% of GDP.

Urban areas are also developing fulfillment needs, with 35 million square feet of additional space required by 2027 for last-mile delivery solutions. This demand aligns with the national policy to enhance logistics efficiency, setting the foundation for a more advanced warehousing landscape.

Shubhendu Kumar of Miebach Consulting underscores that this demand marks a new era of institutional participation, essential for logistics and business advancement in India's fast-evolving economy. Automation is increasingly pivotal, with India poised to become a leading global user of warehouse automation systems. By 2026, the market is expected to reach USD 2 billion annually.

(With inputs from agencies.)