Domestic Manufacturers Outpace Global Firms in India’s Factory Space Race
Indian manufacturers led factory space leasing at 34% CAGR from 2020-25, outpacing multinationals’ 23%: Savills India.
Getty Images
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
Indian manufacturers are leading demand for industrial real estate in the country, according to a report by Savills India. Manufacturing-space leasing by domestic firms grew at a 34% compound annual growth rate (CAGR) between 2020 and 2025, outpacing the 23% CAGR recorded by multinational companies.
Overall manufacturing leasing rose from 5.8 million square feet (msf) in 2020 to an estimated 21.3 msf in 2025, and is projected to reach 30-32 msf by 2030, growing at a CAGR of 7-9% between 2025 and 2030.
Auto and auto components accounted for 31% of the space leased by Indian manufacturers between 2020 and 2025, followed by electrical and electronics at 12% and renewable energy at 10%. Grade-A facilities made up 53-58% of leasing in 2024-25, up from 44% in 2020, reflecting a shift toward higher-quality industrial space. Demand is also spreading beyond established hubs into Tier-II and Tier-III cities.
Leasing activity remains concentrated in key markets, led by Pune (26.7 msf), Chennai (9.4 msf) and Bengaluru, with the National Capital Region, Hosur and Ahmedabad steadily gaining traction.
Foreign manufacturers continue to account for a significant share of leasing activity, taking a more cautious approach through joint ventures and partnerships while transitioning from pilot or assembly operations to full-scale manufacturing. European occupiers led foreign leasing at 44% between 2020 and 2025, followed by APAC at 31%, the Americas at 24%, and the Middle East at 1%.
India’s industrial land bank comprises 4,249 industrial parks spanning 1.6 million acres, with more than 253,600 acres available for development, according to the report.
“Government initiatives such as Make in India, the PLI 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, Savills India.
Indian manufacturers are leading demand for industrial real estate in the country, according to a report by Savills India. Manufacturing-space leasing by domestic firms grew at a 34% compound annual growth rate (CAGR) between 2020 and 2025, outpacing the 23% CAGR recorded by multinational companies.
Overall manufacturing leasing rose from 5.8 million square feet (msf) in 2020 to an estimated 21.3 msf in 2025, and is projected to reach 30-32 msf by 2030, growing at a CAGR of 7-9% between 2025 and 2030.
Auto and auto components accounted for 31% of the space leased by Indian manufacturers between 2020 and 2025, followed by electrical and electronics at 12% and renewable energy at 10%. Grade-A facilities made up 53-58% of leasing in 2024-25, up from 44% in 2020, reflecting a shift toward higher-quality industrial space. Demand is also spreading beyond established hubs into Tier-II and Tier-III cities.
Entrepreneur Staff • Editor
Entrepreneur Staff
For more than 30 years, Entrepreneur has set the course for success for millions of... Read more
