India doubles down on logistics infra as global order shifts from efficiency to resilience, ET Infra
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As the world grapples with rising tariffs , fractured supply chains, and shifting trade alliances, countries are actively re-evaluating their global strategies. Amid this churn, India is charting a distinct course investing heavily in domestic logistics infrastructure as a lever for long-term economic resilience.The last quarter offers ample proof of just how vulnerable the global logistics network remains. The recent escalation of conflict in the Middle East disrupted shipping lanes through the Strait of Hormuz, triggered a surge in oil prices, and sent global freight insurance costs soaring. European shipments to Asia were rerouted, maritime insurance premiums soared, and nations dependent on external trade corridors scrambled to adjust.Yet India's logistics and warehousing sector felt little turbulence, thanks to its structural strength. Unlike traditional supply chains tethered to global trade cycles, India's warehousing story is powered by domestic demand . Knight Frank's India Warehousing Report (Q1 2025) shows a 50 per cent YoY surge in leasing activity. Manufacturing led the charge, with leasing up 94 per cent and accounting for 48 per cent of total take‑up, evidence of long‑term confidence. 3PL volumes grew 12 per cent, though their share slipped to 23 per cent, signaling shifting occupier dynamics. E‑commerce, meanwhile, rebounded sharply, posting a 151 per cent jump in space uptake from a lower base.This domestic‑demand engine is India's strategic moat. While the global narrative centres on de‑risking and near‑shoring, India already has the playbook: warehousing insulated from geopolitics, anchored in the aspirations of 1.4 billion consumers.And it's not just domestic trade that is surging. India is actively rewriting its global trade strategy with infrastructure. In May 2025, the India–UAE Trade Connect under CEPA went live, unlocking seamless logistics corridors between Jebel Ali and Indian ports like Mundra and Nhava Sheva. Port-based warehousing demand in Gujarat and Maharashtra spiked almost immediately, with Free Trade and Warehousing Zones (FTWZs) reporting renewed leasing interest.At the same time, as the India–UK Free Trade Agreement moved into final-stage discussions in June 2025, developers in northern India began positioning for a shift in flows from textile, food processing, and auto component sectors. On the ground, warehousing itself is evolving. Coastal hubs are seeing a rise in port-led warehousing for transhipment and value-added services.In urban India, the Q-commerce boom is triggering a surge in micro-fulfilment centres and dark stores, shrinking delivery timelines and pushing retailers to hold inventory closer to consumption clusters which are defining a new logistics architecture.Investors are noticing. According to Knight Frank, the real estate sector led a remarkable surge in private equity (PE) investment in 2024, reaching $4.2 billion, a 32 per cent surge from the year prior. Warehousing led the charge, accounting for 45 per cent of these investments and surpassing the office sector, which had held the highest share of PE investments since 2017. Global funds are looking for assets that are resilient, compliant, and ESG-aligned and warehousing, once a low-visibility asset class, is now delivering risk-adjusted returns with real operational upside.India is creating a logistics framework that can scale with demand, absorb external shocks, and meet global benchmarks all while staying cost-competitive.Going forward, the focus must shift to unlocking the next layer of institutional capital. Easing land acquisition for warehousing parks, simplifying inter-state goods movement, and enabling REIT, InvIT, or AIF-style participation could further democratise access and deepen market liquidity.As the global order shifts from efficiency to resilience, India's warehousing sector may well become the blueprint for both.(The author is Managing Director and Co-Founder, Welspun One Logistics Parks. Views are personal.)
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