Unpacking India’s Industrial and Logistics Sector Growth 2024: Insights from KSH Infra

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India's Industrial and Logistic sector

India’s industrial and logistics sector is undergoing a significant transformation, marking an impressive growth trajectory. At KSH Infra, we have been closely monitoring these developments. Our insights aim to shed light on the dynamic factors and emerging trends that are shaping this sector.

2023 Sector Analysis:

In 2023, the sector witnessed a remarkable 6.7% increase in absorption, reaching a notable 49 million sq ft. This growth was predominantly seen in Tier I cities, accounting for 75% of this expansion. This statistic underscores the vital role of major urban centers in driving the sector’s growth.

Rising Demand in Various Sectors:

The increase in demand across the sector is multifaceted, primarily driven by key areas such as manufacturing, retail, and third-party logistics (3PL). Government initiatives like ‘Make in India’ and the Production Linked Incentive (PLI) scheme have acted as significant catalysts, boosting sectoral growth and enhancing India’s appeal as a manufacturing and logistics hub.

Supply Dynamics in 2023:

The year 2023 also saw a surge in supply, with an addition of 62 million sq ft to the market. Notably, the majority of this new supply, around 75%, originated from Tier I cities. This increase in supply is a direct response to the growing demand and an indicator of the confidence of major developers in the sector’s potential.

Evolution of Grade A Spaces:

The industrial and logistics sector is witnessing a notable shift towards high-quality, compliant infrastructure. In 2023, Grade A spaces, known for their superior standards and amenities, accounted for 53% of the total market supply, a significant increase from 48% in the previous year. This trend highlights an increasing preference for premium, well-equipped spaces, reflecting a maturing market and evolving customer expectations.

Forecast for 2024 and Beyond:

Looking ahead, the growth trajectory for India’s industrial and logistics sector appears robust. The 3PL and manufacturing sectors, in particular, are poised to drive this expansion. We anticipate the absorption rate to exceed 13%, with supply growth potentially surpassing 14%. This optimistic forecast is underpinned by the continued evolution of the sector and supportive governmental policies.

E-commerce Impact on Warehousing:

E-commerce has been a game changer for the warehousing segment. Its influence extends beyond traditional urban centers, stimulating significant growth in Tier II and III cities. The sector’s contribution to warehousing and logistics is set to see a considerable increase, a testament to the expanding reach and innovative business models of e-commerce companies. This trend underscores the evolving landscape of Indian warehousing, transitioning from conventional storage solutions to more advanced, technology-driven facilities.

Regional Highlights and Trends:

Delhi-NCR, Mumbai, Bengaluru, and Pune have emerged as the powerhouses in the industrial and logistics sector, contributing significantly to the overall growth. However, the momentum is wider than these metros. We are witnessing a gradual but definitive shift towards other urban and semi-urban areas. This expansion diversifies the sector’s geographic footprint, indicating a more inclusive growth pattern across the country.

Future of Rental Values:

In the coming year, we expect a marginal rise in rental values for compliant buildings. This increase, however, will vary based on location, reflecting the differing regional dynamics and demand patterns.


India’s industrial and logistics sector is on the brink of a transformative phase. With rapid growth, evolving market dynamics, and increasing diversification, stakeholders must stay informed and agile. Adapting to these changes will be vital to capitalizing on the opportunities this sector presents.

At KSH Infra, we are at the forefront of understanding and adapting to these trends. For more insights and to explore collaboration opportunities, we invite you to connect with us and join in shaping the future of India’s industrial and logistics landscape.

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