India’s logistics and warehousing sector is witnessing rapid evolution, powered by government policies, infrastructure enhancements, technological advancements, and the changing consumption patterns of its people.
The sector’s remarkable growth is increasingly being fuelled by emerging tier 2 and tier 3 cities, which are rapidly becoming key drivers of this transformation.
According to a recent report by JLL, India’s total warehousing stock reached 533.1 million square feet in 2024, with approximately 100 million square feet, or 18.7 per cent, now coming from tier 2 and 3 cities.
This marks a significant shift in the country’s logistics map, as these cities emerge as vital hubs for distribution networks.
The development of a hub-and-spoke model, further enhanced by the implementation of Goods and Services Tax (GST), is playing a key role in expanding warehousing capacity in these regions, especially for fulfilling the growing e-commerce demands.
The consumption boom, particularly driven by the online shopping trend, has led to increased demand for fulfillment centers closer to consumers, the report added.
The report further stated that the shift is not only improving last-mile delivery but also reducing logistics costs by placing supply chains closer to end users.
According to an ANAROCK Capital report, 2025 may exceed the 25 per cent annual growth seen in industrial and logistics space absorption last year.
The report added that the country’s logistics sector is advancing rapidly, propelled by increasing investments, digital transformation and robust policy initiatives.
The warehousing and logistics sector contributes 13-14 per cent to India’s GDP and is expanding to keep pace with the country’s rapid economic growth.
With the rapid expansion of e-commerce and the government’s focus on infrastructure development, the warehousing and logistics sector is seen as a key driver of economic growth, according to Union Minister of Consumer Affairs, Food and Public Distribution, Pralhad Joshi.
With the launch of the National Logistics Policy (NLP) and the PM Gati Shakti Programme, “we aim to bring down logistics costs from the existing 13-14 per cent to global standards of around 8 per cent,” the minister noted at an event on Sunday.
