India’s logistics and warehousing industry is transforming at a fast pace, fueled by a mix of policy reforms, infrastructural development, digitalization, and changing consumer behavior. While capital cities have had their turn long enough, one trend that is emerging today is tier 2 and tier 3 cities emerging as growth drivers.
India’s overall warehousing inventory was
533.1 million square feet in 2024, and tier 2 and tier 3 cities added approximately 100 million square feet—approximately 18.7% of the totala recent JLL report stated. This is a major change in India’s logistics master plan, with these small cities as key distribution centers.
The Hub-and-Spoke Revolution
One of the key drivers of this shift is the addition of the hub-and-spoke structure, complemented in turn by the roll-out ofGoods and Services Tax (GST). It is guaranteeing maximum supply chain management, maximality in allocating the inventory, and having products closer to customers. There was a growing need for quicker and quicker delivery, especially with growing e-commerce retailing. These places had more urgent demand for warehousing than ever before.
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One of the key drivers of this shift is the addition of the hub-and-spoke structure, complemented in turn by the roll-out of
It is guaranteeing maximum supply chain management, maximality in allocating the inventory, and having products closer to customers. There was a growing need for quicker and quicker delivery, especially with growing e-commerce retailing. These places had more urgent demand for warehousing than ever before.
The E-Commerce Effect
With more online transactions, companies are targeting fulfillment centers placed strategically near their customer base. This is reducing last-mile delivery costs along with accelerating turnaround time. JLL’s report identifies the manner in which this step is causing supply chains to be more reactive as well as cutting logistics cost substantially.
The Growth Trajectory
The pace in the logistics industry will go on.
2025 will surpass last year’s 25% year-on-year
uptake of industrial and logistics space, according to report. The industry is changing fast with more investment, tech innovations, and positive policy changes.
A Pillar of Economic Growth
The warehousing and logistics sector contributes around. With a keen emphasis on infrastructural growth and digitalization, the government is pacifying this sector to emerge as a major economic force. Union Consumer Affairs Minister, Food and Public Distribution Pralhad Joshi pointed to the importance of the sector at a recent event, saying that efforts like National Logistics Policy (NLP)
and PM Gati Shakti Programme
would decrease the cost of logistics from the existing 13-14% to the international level of around 8%.
The Future Ahead
Even as e-commerce is expanding with a speedier pace and money continues to get invested in the infrastructure, warehousing and logistics is sure to change the economic landscape of India. Since tier 2 and tier 3 cities are increasingly becoming centers of logistics, they not only alter supply chains but also usher the country into promised long-term economic growth.
The future of Indian logistics is not about large cities anymore, it’s about a network of interconnected nodes that are driving efficiency, access, and economic development.
