Warehousing sector in India gets boost as global supply chains shift from China

This increase is primarily driven by favorable government initiatives and a global strategy to diversify supply chains away from China. Cities like Pune, Delhi-NCR, and Kolkata are emerging as key beneficiaries of this growth, further bolstering India’s manufacturing sector, which employs over 27 million people.

According to a CBRE report, the demand for warehousing in sectors such as engineering, electronics, and auto manufacturing has increased significantly from 15% in 2019 to 25% in the first half of 2024. This shift is mainly attributed to: Government Policies: The Production Linked Incentive (PLI) scheme is one of the primary government initiatives boosting demand for warehousing. China +1 Strategy: Many global businesses are adopting a ‘China + 1’ strategy, where they diversify their supply chains away from China to other countries like India.

Total warehousing leasing from the aforementioned sectors reached an impressive 4.1 million sq. ft. in the first half of 2024. Cities like Pune, Delhi-NCR, and Kolkata are at the forefront of this demand surge:

India’s focusing on expanding trade agreements has opened up substantial opportunities for its manufacturing sector. As Ram Chandnani, Managing Director of Advisory & Transactions Services at CBRE India, noted, the country’s strategic trade focus can act as a catalyst for growth. Indian manufacturers are presented with a golden opportunity to diversify their operations beyond services and capture a larger portion of the global manufacturing market.