India’s factory space demand is set for a big jump

By Sohail Khan 9 September 2026, 8:18 am

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Business News›Industry›Services›Property / C'struction›Manufacturing firms' factory leasing seen rising to 30-32 million sq ft annually by 2030: Report

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Manufacturing firms' factory leasing seen rising to 30-32 million sq ft annually by 2030: Report
Synopsis

Factory space leasing in India is projected to reach thirty to thirty-two million square feet annually by 2030. This growth is fueled by capacity expansion and localization across key manufacturing sectors. Traditional industrial sectors like auto and electronics lead current leasing activity, while new high-growth areas are emerging. European and APAC occupiers dominate manufacturing space leasing, reinforcing India's global position.

Trump fast-tracks Utah uranium mine, but industry revival may wait for higher prices — Factory space leasing in India is projected to reach thirty to thirty-two million square feet annually by 2030. This growth is fueled by capacity expansion and localization across key manufacturing sectors.

New Delhi: Leasing of factory space by manufacturing companies is projected to rise to 30-32 million sq ft annually by 2030 from 21.3 million sq ft in 2025, driven by capacity expansion, localisation and high-value sectors such as electronics, semiconductors, renewables and automobiles, according to a report.

India has built one of the world’s largest industrial land ecosystems to support manufacturing-led growth, show data from real estate services company Savills. The India industrial land bank comprises 4,249 industrial parks spanning 1.6 million acres, with more than 253,600 acres readily available for development, it said in the report.

Also Read: GCCs, tightening supply to keep India's office market on growth track: Equirus

“Government initiatives such as Make in India, the PLI (production-linked incentive) scheme and Atmanirbhar Bharat, along with global supply chain shifts, are accelerating India’s transition from ‘Make in India’ to ‘Made by India’, positioning it as a competitive manufacturing and export hub,” said Srinivas N, managing director – Industrial & Logistics at Savills India. “Over time, the sector is expected to move beyond its traditional cost advantage towards a capability-led ecosystem anchored in innovation, supply chain resilience, and export competitiveness,” he said.

Leasing activity by manufacturers is expanding across the country, but remains concentrated in key hubs, led by Pune (26.7 million sq ft), Chennai (9.4 million sq ft) and Bengaluru, according to Savills. The National Capital Region and emerging markets like Hosur and Ahmedabad are steadily gaining traction.

Demand for manufacturing space is led by traditional industrial sectors, with auto and auto components (29%) and electrical and electronics (18%) accounting for nearly half the total leasing recorded between 2020 and 2025.

Leasing by sectors such as machinery and equipment (9%), renewable energy (8%) and metal products is also growing, reflecting the broadening of India’s manufacturing base, it said.

Amid ongoing diversification and expansion of manufacturing activity, average space leased increased from 71,000 sq ft in 2022 to 94,000 sq ft in 2025, with occupiers consolidating operations into large-format, Grade-A industrial spaces.

Also Read: Bengaluru warehouse leasing jumps 78% to 3.1 MSF in H1 2026, fastest growth among major markets

European occupiers (44%) dominated manufacturing space leasing during 2020–2025, while APAC (31%) followed with strong investments across key sectors. Demand from the Americas (24%) and the Middle East (1%) remained moderate but continued to grow steadily, reinforcing India’s position as a resilient manufacturing hub.

Demand is expected to shift further towards larger, institutional-grade facilities capable of supporting automation, scalability and sustainability requirements. High-growth sectors such as semiconductors, electric vehicles, electronics, renewable energy, batteries and energy storage, and aerospace and defence segments are likely to play pivotal roles in driving the manufacturing space demand, according to the company.

The industrial land ecosystem in India includes 1.85 million industrial plots, of which nearly 415,000 are vacant and available for immediate allotment. It is estimated that over 40,000 acres of land were allotted in 2025 for manufacturing-led activities and warehousing, the report said.

Government initiatives continue to strengthen India’s manufacturing ecosystem through the development of industrial cities, sector-specific clusters, industrial corridors and technology hubs.

Projects such as Dholera SIR, Greater Bengaluru AI City, Hyderabad Pharma City, Krishnapatnam Industrial Node, PM Mitra Parks and the Dholera Semiconductor Ecosystem are expanding the availability of investment-ready land and supporting industrial growth across key sectors, it said.

Emerging initiatives such as the 100 Industrial Parks Programme and the Smart Industrial Cities Programme are further enhancing India’s manufacturing and investment landscape.

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