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Despite global supply chain disruptions and geopolitical tensions in West Asia, India's industrial and warehousing market is showing remarkable resilience. Demand for Grade A industrial and logistics space climbed 12% year over year in the first half of 2026, reaching nearly 22 million square feet, with Delhi NCR and Chennai accounting for more than 45% of all leasing activity, according to a new Colliers report.

The report highlights that while the second quarter saw a slight slowdown, India's logistics sector remains firmly on a growth trajectory, driven by domestic manufacturing, e-commerce, and third-party logistics (3PL) companies.

Delhi NCR and Chennai account for nearly half of India's warehouse leasing

Leasing activity totaled around 11 million square feet in Q2 2026, just 1% lower than the previous quarter, as companies navigated supply chain disruptions linked to the ongoing conflict in West Asia. Even so, occupier demand remained robust across India's major logistics hubs.

Delhi NCR led the market with 5.9 million square feet of leasing during H1 2026, followed by Chennai with 4.1 million square feet. Together, the two markets captured more than 45% of total Grade A warehouse leasing. Mumbai, Pune and Bengaluru also posted strong performances, each recording more than 2 million square feet of absorption during the first half of the year.

"The first half of 2026 reaffirmed the ongoing demand scale-up in India's industrial & warehousing market by recording ~22 million sq ft of Grade A space uptake, a YoY rise of 12%. The annual growth is particularly significant, given the challenging second quarter amid evolving global supply chains. Quarterly demand remained firm in Q2 at nearly 11 million sq ft, albeit witnessing a marginal 1% dip compared to the previous quarter," said Vijay Ganesh, managing director, Industrial & Logistics Services, Colliers India.

3PL firms stay on top as engineering and e-commerce drive fresh demand

Third-party logistics providers remained the biggest occupier group, accounting for 30% of total leasing during H1 2026. Engineering companies ranked second with a 21% share, followed by e-commerce firms at 16%. The electronics sector also stood out, with leasing demand nearly doubling compared with a year earlier, highlighting the growing diversification of occupiers.

Large warehouse transactions continued to dominate the market. Deals exceeding 200,000 square feet accounted for about 40% of total leasing, with e-commerce companies responsible for more than 30% of these mega transactions. Delhi NCR and Chennai led the country in large-format warehouse deals.

Developers ramp up supply despite global supply chain disruptions

Developers remained bullish on the sector, delivering 24.7 million square feet of new Grade A industrial and warehousing space during H1 2026, a 27% increase from a year earlier. New supply exceeded demand as developers accelerated construction of modern, technology-enabled logistics parks.

Delhi NCR and Mumbai together contributed more than 40% of total project completions, while Bengaluru and Pune nearly doubled their new supply compared with the first half of 2025. Overall vacancy rose to 17.2%, reflecting the faster pace of new deliveries, although premium logistics parks continued to command higher rentals.

Colliers expects infrastructure push and manufacturing growth to fuel 2026 expansion

Looking ahead, Colliers believes India's industrial real estate market remains well positioned for sustained growth despite global uncertainties.

"While Delhi NCR & Chennai continued to anchor leasing during H1 2026, cities such as Pune, Ahmedabad & Kolkata witnessed growth of 30% and upwards, signaling the emergence of a more diversified demand landscape. Going forward, infrastructure-led development and expanding domestic manufacturing, coupled with moderating global headwinds, are expected to reinforce the growth trajectory of industrial & warehousing sector through 2026," Vijay Ganesh said.

Echoing that optimism, Vimal Nadar, national director and head of research, Colliers India, said, "Amid ongoing conflict in Western Asia and constantly evolving global trade realities, India's industrial & warehousing market demonstrated remarkable resilience in H1 2026. The sustained dominance of 3PL occupiers, coupled with growing participation from Engineering and E-commerce firms, underscores the vitality of India's domestic manufacturing capabilities and consumption driven economy. Looking ahead, a strong development pipeline and upbeat investor sentiment are expected to drive Grade A supply to 45-50 million sq ft by the end of 2026."

Discover more at New India Abroad.