Manufacturing rises to India's 2nd-largest industrial leasing segment

The sector is forecast to hit 46m sq ft by 2030, according to JLL.

Gross manufacturing leasing has reached a cumulative 69 million sq ft, registering a 49% compound annual growth rate since 2021, JLL said. This makes manufacturing the second-largest occupier segment after third-party logistics.

In 2025, gross absorption was 19.2 million sq ft, whilst the first half of 2026 saw 10.2 million sq ft, a 19% year-on-year increase.

Grade-A properties accounted for 90% of manufacturing leasing in 2025, reflecting a shift to high-specification facilities.

Pune and Chennai have become the top manufacturing leasing hubs among eight Tier-I cities, followed by NCR-Delhi, Bengaluru, Mumbai, Ahmedabad, and Hyderabad. Fourteen emerging markets, including Lucknow, Jaipur, and Surat, are seeing manufacturers favour land transactions over leasing.

JLL attributed the leasing growth to India's Production Linked Incentive scheme, which has attracted 836 applications across 14 sectors and generated cumulative investments exceeding INR2.16t ($25.9b) and 14.39 lakh direct and indirect jobs since 2020, as well as expanded Free Trade Agreements.

Manufacturing leasing absorption is forecast to reach 46 million sq ft by 2030, accounting for 40% of India's total industrial and warehousing absorption, JLL said.

"Tier-I cities are witnessing aggressive leasing of Grade-A facilities as manufacturers prioritise speed-to-market and be capex-light due to paucity of affordable land. Simultaneously, Tier-II markets are seeing manufacturers opt for land acquisition, seeking greater customisation and long-term operational control," said Yogesh Shevade, Managing Director, Industrial & Logistics, India, JLL.