India’s manufacturing sector is entering a new phase of expansion, with demand for industrial space expected to reach 30-32 million sq. ft. by 2030 as manufacturers increase capacity, localise production and invest in high-value sectors.
According to Savills India’s latest report, Beyond Make in India: The Rise of Made by India, manufacturing space leasing grew at a 30% CAGR between 2020 and 2025. The report tracks leasing activity across Tier-I, Tier-II and Tier-III cities, examining the sectors driving demand, deal sizes, occupier preferences and the geographies from which manufacturers are sourcing space.
Savills India expects manufacturing leasing to grow at a 7-9% CAGR between 2025 and 2030. While established Tier-I markets continue to account for a large share of activity, manufacturing expansion is increasingly reaching emerging Tier-II and Tier-III locations.
Pune remains the country’s largest manufacturing leasing market, recording 26.7 million sq. ft. of activity between 2020 and 2025. Chennai followed with 9.4 million sq. ft., while Bengaluru also remained a key manufacturing hub. NCR and emerging locations such as Hosur and Ahmedabad are gaining traction as manufacturers broaden their production networks.
The sectoral mix also shows how India’s manufacturing base is expanding beyond its traditional industrial strengths. Auto and auto components accounted for 29% of total manufacturing leasing during the period, translating to 18.6 million sq. ft. Electrical and electronics followed with 18%, or 11.5 million sq. ft.
Machinery and equipment contributed 9%, with 5.4 million sq. ft. leased, while renewable energy accounted for 8%, at 5.1 million sq. ft. The growing contribution of these sectors points to a wider manufacturing ecosystem, supported by investments in technology, energy transition and industrial infrastructure.
The size of manufacturing requirements is also increasing. Average space leased rose from around 71,000 sq. ft. in 2022 to 94,000 sq. ft. in 2025. The rise suggests that occupiers are increasingly consolidating operations in larger facilities rather than relying on smaller industrial units.
This shift is also changing the specifications sought by manufacturers. Demand is moving towards larger, Grade-A and institutional-grade facilities that can accommodate automation, future expansion, sustainability measures and more efficient operations.
Global manufacturers continue to be an important source of demand. European companies accounted for 44% of manufacturing space leasing between 2020 and 2025, making Europe the largest sourcing region. APAC occupiers followed with 31%, while companies from the Americas accounted for 24%. The Middle East contributed 1%, with demand from other regions also showing steady growth.
The geographical spread of demand reflects India’s growing role in global manufacturing and supply chains. Capacity expansion and localisation are expected to remain key drivers, while sectors such as electronics, semiconductors, renewable energy and automobiles are likely to account for a growing share of industrial requirements.
“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.
Over the longer term, Srinivas said the sector is expected to move beyond its traditional cost advantage. “The sector is expected to move beyond its traditional cost advantage towards a capability-led ecosystem anchored in innovation, supply chain resilience, and export competitiveness,” he added.
The next phase of industrial space demand is therefore likely to be shaped not only by the volume of manufacturing activity, but also by the changing requirements of manufacturers. Facilities will increasingly need to support automation, technology adoption, scalability and sustainability.
Semiconductors, electric vehicles, electronics, renewable energy, batteries and energy storage, along with aerospace and defence, are expected to be among the sectors driving this shift. Their expansion could also widen the manufacturing footprint beyond established industrial centres and create stronger demand for modern facilities in emerging markets.
With leasing expected to reach 30-32 million sq. ft. by 2030, the industrial real estate market is set for continued expansion. The combination of domestic capacity building, global supply-chain diversification and the emergence of high-value manufacturing is giving India’s industrial property market a broader growth base, spanning established Tier-I hubs as well as the next generation of manufacturing locations.
