India Logistics Growth Shifts Beyond Metro Cities

India’s logistic market is undergoing a powerful shift as metropolitan warehouses face rising costs, congestion and capacity limitations, mid-sized cities are stepping up as the next frontier for logistics infrastructure. According to a recent report, Tier-2 and Tier-3 cities now contribute 100 million sq ft, or about 18.7 per cent of the total stock since 2017.

The logistics sector gained strong momentum under the National Logistics Policy (NLP) and infrastructure initiatives like PM GatiShakti National Master Plan. These reforms accelerated development of multimodal logistics corridors, warehousing, and supply-chain integration. A key highlight of the year has been the continued progress of the Production Linked Incentive (PLI) schemes, launched for 14 strategic sectors with an outlay of ₹1.97 lakh crore. 

As companies sought faster distribution and lower costs, Tier-2 and Tier-3 cities emerged as attractive alternatives to congested metros offering lower real-estate and operating costs, better last-mile reach, and improved regional access. Simultaneously, digital platforms such as the Unified Logistics Interface Platform (ULIP) enhanced supply-chain transparency and boosted efficiency.

Expansion‍‌‍‍‌‍‌‍‍‌ of logistics into non-metro areas is going to be more and more evident in the future. The continuation of manufacturing growth will result in the demand for regional warehousing and distribution hubs rising even further. We are forecasting that micro-warehousing, cold-chain facilities, and last-mile networks will be the focus of growth. The enhanced multimodal connectivity rail, road, and waterways will make the supply chain more resilient. AI and IoT-driven logistics tools will be there to further optimise routes, lower costs, and make deliveries faster.

"This year marked a turning point for India’s logistics industry. With rising metro costs and stronger infrastructure in emerging cities, supply chains naturally expanded into Tier-2 and Tier-3 regions. Looking ahead to 2026, we expect these markets to drive the next wave of logistics growth. At Airattix, our focus is on enabling companies to scale through flexible, asset-light warehousing models and smarter distribution networks. The year ahead will bring greater operational efficiency, reduced transit time, and a more balanced logistics footprint across India."

For enterprises, relocating warehousing footprints to Tier-2/3 cities of the country means cutting down the costs, becoming more agile, and gaining access to the growing regional markets. For investors and policymakers, it is a sign of growth rebalancing beyond the metros, thus opening up the possibilities of job creation, regional development, and more extensive economic growth all over‍ ‌‍‌‍‍‌‍‌‍‍‌India.