India’s manufacturing sector is witnessing an unprecedented transformation, with leasing demand for industrial spaces projected to capture 40% of the market by 2030, according to JLL’s latest research report, “Great Places of Manufacturing in India (GPMI) 2.0: Advanced Manufacturing Clusters.”

Gross manufacturing leasing has reached a cumulative 69 million sq. ft., registering an impressive 49% CAGR since 2021. Manufacturing has now emerged as the second-largest occupier segment after third-party logistics (3PL), signaling a fundamental restructuring of India’s industrial real estate hierarchy. In 2025 alone, gross absorption touched 19.2 million sq. ft., with H1 2026 recording 10.2 million sq. ft.-a 19% year-over-year increase for the first half.

“The growth in manufacturing real estate asset class reflects two distinct yet complementary strategies shaping India’s industrial landscape. 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 customization and long-term operational control. Both approaches signal robust manufacturing commitment; whether through leasing or ownership, India is becoming the factory floor of choice,” said Yogesh Shevade, Managing Director, Industrial & Logistics, India, JLL.

Grade-A properties captured 90% of manufacturing leasing in 2025. This shift toward high-specification facilities reflects stringent adherence to enhanced building standards, hygiene protocols, and safety norms. This trend continues into 2026.

GPMI 2.0, as sequel to GPMI report released by JLL in 2020 highlights Top advanced manufacturing sectoral destination in India. Emphasizes how Pune and Chennai have established themselves as manufacturing leasing epicenters among India’s eight Tier-I cities. These hubs are followed by NCR-Delhi, Bengaluru, Mumbai, Ahmedabad, and Hyderabad, which together form the backbone of India’s Grade-A manufacturing infrastructure.

Meanwhile, 14 emerging markets including Lucknow, Jaipur, Chandigarh tri-city, Bhubaneswar, Guwahati, Surat, Nagpur, Nashik, Goa, Indore, Sambhajinagar, Tuticorin, Coimbatore & Vizag are witnessing manufacturers prioritize land transactions over leasing, reflecting diverse regional strategies aligned with specific operational requirements.

Driving this unprecedented leasing momentum is a convergence of strategic policy initiatives and expanding global trade partnerships that have positioned India as a preferred manufacturing destination. As the world’s 6th largest economy, India is executing one of the most ambitious industrial transformations the 21st century has witnessed. India’s Production Linked Incentive (PLI) scheme has emerged as a transformative force, attracting 836 applications across 14 sectors and generating cumulative investments exceeding INR 2.16 trillion and 14.39 lakh direct and indirect jobs since its launch in 2020. Complementing this, India’s expanded network of Free Trade Agreements has dramatically enhanced market access.

Looking Ahead

With manufacturing leasing absorption forecast to reach approximately 46 million sq. ft. by 2030, representing 40% of India’s total industrial and warehousing absorption, the sector’s trajectory underscores India’s evolution toward becoming a global manufacturing powerhouse aligned with its Vision 2047 aspirations.