New Delhi, July 2 (IANS) India’s industrial and logistics sector sustained its momentum in 2026, with absorption reaching 34.8 million square feet in the first half this year, marking a 2.4 per cent year-on-year growth, a report said on Thursday.

The report from Savills India said demand was primarily driven by manufacturing (30 per cent) and third-party logistics (23 per cent) occupiers.

Sustained demand traction was also recorded from FMCG and FMCD (18 per cent), and e-commerce (10 per cent) segments, indicating broad-based growth across key segments.

Tier 1 cities continued to dominate, accounting for 78 per cent of total absorption, while Tier 2 and 3 markets contributed 22 per cent, the report noted.

Srinivas N, Managing Director, Industrial and Logistics, Savills India, said India’s manufacturing ecosystem is rapidly evolving into a globally integrated ‘Made for India and the World’ platform.

Supported by proactive trade agreements and rising investments, this shift is driving strong demand for industrial and logistics real estate.

“As supply chains diversify and manufacturing expands, growth will be led by scale and new industrial clusters, creating long-term opportunities and strengthening India’s position in global value chains,” he added.

The market witnessed a fresh supply of 42.7 million sq. ft. of which Tier- I cities accounted for 36.7 million sq. ft. or 86 per cent of the total supply.

Tier 2 and 3 cities contributed 6 million sq. ft. or 14 per cent of total supply. The market witnessed delivery of projects across cities in tandem with growing demand, the report noted.

“The demand for Grade-A space has strengthened significantly in recent years, driven by increasing focus on quality, compliance, and evolving ESG requirements. Consequently, Grade-A absorption rose to 59 per cent in H1 2026, up from 55 per cent in H1 2025,” it said.

Delhi-NCR remained the highest contributor to absorption at nearly 20 per cent, followed by Pune and Mumbai with 17 per cent and 16 per cent respectively.

—IANS

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