India’s warehousing sector is witnessing unprecedented growth, with Tier II-III cities emerging as major contributors. As of 2024, the country’s total warehousing stock has surged to 533 million sq. ft., with 12 emerging Tier II-III cities accounting for approximately 100 million sq. ft., representing 18.7% of the total stock. This shift underscores a growing reliance on the hub-and-spoke model, enhancing last-mile delivery capabilities and strengthening India’s logistics framework.
According to JLL India, the nation’s combined warehouse absorption across 20 major markets hit an all-time high of 60 million sq. ft. in 2024. Notably, Grade A spaces constitute around 30% of the total inventory in these emerging Tier II-III cities.
Tier II-III Cities Leading the Charge
The expansion of the warehousing market in emerging cities is driven by several factors, including the surge in e-commerce, rising demand for fulfillment centers, and infrastructure development. As companies seek to reduce logistics costs and enhance delivery speed, they are increasingly establishing warehouses in these cities.
Key data from JLL India’s report highlights the warehousing stock distribution and growth in Tier I and Tier II-III cities:
| Category | Stock (million sq. ft.) | Absorption (million sq. ft.) | Avg. Grade A Rent (INR/sq. ft./month) | Avg. Grade B Rent (INR/sq. ft./month) |
|---|---|---|---|---|
| Top 8 Tier I Cities | 438 | 51 | 24.8 | 20.5 |
| Emerging 12 Tier II-III Cities | 95 | 9 | 22.0 | 17.5 |
Regional Growth Trends
The report categorizes growth trends in emerging warehousing cities across India:
East India
- Total Stock: 22.8 million sq. ft. (6x growth since 2017)
- Key Markets: Bhubaneswar-Cuttack (5.6 million sq. ft.), Guwahati (8.0 million sq. ft.), Patna (9.2 million sq. ft.)
North India
- Total Stock: 35.6 million sq. ft. (4x growth since 2017)
- Key Markets: Chandigarh-Rajpura (14.1 million sq. ft.), Jaipur (6.0 million sq. ft.), Lucknow (8.5 million sq. ft.), Ludhiana (7.0 million sq. ft.)
South India
- Total Stock: 15.2 million sq. ft. (3x growth since 2017)
- Key Markets: Coimbatore (6.6 million sq. ft.), Kochi (8.6 million sq. ft.)
West India
- Total Stock: 21.2 million sq. ft. (3x growth since 2017)
- Key Markets: Goa (6.7 million sq. ft.), Nagpur (13.0 million sq. ft.), Nashik (1.5 million sq. ft.)
Industry Experts Weigh In
Yogesh Shevade, Head – Logistics & Industrial, India, JLL, emphasized the rapid growth of the warehousing sector in emerging cities. “Since the implementation of GST, the Indian warehousing market has expanded significantly in major cities. Now, the hub-and-spoke model is playing a critical role in spreading this growth to Tier II-III cities. In 2024, these cities accounted for nearly 100 million sq. ft. of stock, marking a fourfold increase since 2017. We anticipate continued expansion, fueled by infrastructure initiatives connecting these cities to major consumption hubs. This transformation is creating new investment opportunities for both investors and developers.”
Government Initiatives Fueling Growth
The expansion of warehousing in emerging cities is strongly supported by government initiatives such as PM Gati Shakti, Bharatmala, Sagarmala, and the UDAN Scheme. These programs are optimizing distribution networks and improving connectivity. Additionally, policies like Make in India, Digital India, and the National Logistics Policy are fostering a robust manufacturing ecosystem. Production-Linked Incentives (PLI) and Design-Linked Incentives (DLI) schemes are also encouraging companies to set up manufacturing units in these cities, further driving the need for high-quality warehousing infrastructure.
JLL’s Report Launched at LogiMAT India 2025
The findings were unveiled in “The Shifting Landscape of Warehouse Markets Report,” presented by JLL at LogiMAT India 2025 in Mumbai. The event, held at the Bombay Exhibition Centre, saw participation from key industry leaders, including Dr. P. Anbalagan (IAS), Secretary of the Industries Department, Government of Maharashtra, and Aditya Gupta, CEO of Messe Stuttgart India.
Aditya Gupta remarked, “This report by JLL aims to bridge the gap in India’s logistics and warehousing sector by highlighting the growing prominence of Tier II-III cities as new warehousing hubs. I believe this report will inspire discussions and strategic collaborations that will drive the industry forward.”
Conclusion
The rise of Tier II-III cities as warehousing hubs is redefining India’s logistics landscape. As businesses optimize their supply chains and enhance delivery efficiencies, the sector is poised for sustained growth. With continued investments in infrastructure and policy support, these cities are set to play a crucial role in the future of warehousing in India.
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