E-commerce Boom: India's Warehousing Landscape Transformed by Tier II-III Cities

A JLL report reveals India's e-commerce surge is reshaping its warehousing landscape, highlighting Tier II and III cities as new logistic hubs. The demand for modern facilities and strategic infrastructure initiatives are driving this change, offering lucrative opportunities for investors and developers in the logistics sector.

India's e-commerce sector is catalyzing a major transformation in the nation's warehousing landscape, as reported by global real estate consultancy JLL. The rise of online shopping is amplifying demand for modern storage and distribution facilities, especially in Tier II and III cities, marking them as new logistic hubs.

To enhance delivery times and reduce logistics costs, companies are establishing smaller warehouses in these emerging cities. These urban areas also provide larger space availability due to lower population density, making them ideal for facilities near consumption centers, the report notes.

As of 2024, India boasts a total warehousing stock of 533.1 million square feet, with Tier II-III cities contributing 100 million square feet, approximately 18.7% of the total stock. This shift aligns with the GST-initiated hub-and-spoke model, redesigning India's logistics map, stated Yogesh Shevade, Head - Logistics & Industrial, India at JLL. He emphasized ongoing infrastructure initiatives like PM Gati Shakti and the National Logistics Policy are optimizing distribution networks and fostering manufacturing ecosystems. The introduction of PLI and DLI schemes further incentivizes companies to establish manufacturing facilities in these cities.