India’s Industrial and Logistics Sector Grows 14% YoY in Q3 2026: Savills India
New Delhi, October 10, 2026: India’s industrial and logistics sector maintained its upward trajectory, recording 24.3 million sq. ft. of absorption in the third quarter of 2026, marking a 14.1% year-on-year growth, according to a press release issued by international real estate advisory firm Savills India. Cumulative absorption for the first nine months of 2026 reached an all-time high of 59.1 million sq. ft., representing a 6.9% increase over the same period last year.
Tier-I cities continued to anchor market activity, accounting for 19.9 million sq. ft. or an 82% share of total absorption in Q3 2026. Simultaneously, Tier-II and III cities contributed 4.4 million sq. ft., representing an 18% share of total absorption and 27% of total market supply. Fresh completions across the country totaled 26.2 million sq. ft. during the quarter, a 21.3% year-on-year expansion.
Market demand increasingly favored high-quality infrastructure due to compliance needs, rising ESG considerations, and a growing emphasis on operational efficiency. Consequently, Grade-A space absorption rose to 66% in Q3 2026 compared to 52% in Q3 2025.
Sectoral trends revealed that the manufacturing segment strengthened its contribution, capturing 31% of total absorption in Q3 2026 up from 27% in the previous year. The third-party logistics (3PL) sector remained robust with a 26% share, while the retail sector doubled its presence from 5% to 12%. E-commerce and FMCG/FMCD segments held steady at 10% and 9% respectively.
Geographically, Delhi-NCR led regional absorption with a 20% share, followed by Bengaluru at 16%, and Mumbai and Pune at 14% and 13% respectively. On the supply side, Pune emerged as the leading contributor at 18%, followed closely by Delhi-NCR and Mumbai at 15% each.
Looking ahead, the press release notes that India’s industrial and logistics sector is projected to sustain steady growth through 2026. This expansion will likely be propelled by ongoing manufacturing development, supply chain realignments, robust occupier demand, and expanding commercial activities across Tier-II and III urban centers.
