India’s manufacturing and logistics ecosystem is undergoing a significant transformation, driven by strong policy support and large-scale infrastructure investments. Cushman & Wakefield’s latest report, Elevating India’s Manufacturing Resilience: Charting the Path to Self-Reliance, presents a comprehensive analysis of this evolving landscape—highlighting the sector’s growing maturity and global potential, while also addressing persistent challenges around logistics costs, limited domestic value addition, and MSME productivity.
At the heart of the report lies a proprietary survey conducted with 94 senior decision-makers across India’s manufacturing and logistics sectors, including chief executives, plant heads, and supply chain leaders, capturing a mix of perspectives from large enterprises and MSMEs. These respondents represent a diverse group, with 56% of companies employing over 500 people, offering a credible pulse of industry sentiment.
Industrial Momentum Accelerates
The survey reveals high optimism regarding the impact of government-led infrastructure initiatives such as Bharatmala, Sagarmala, Dedicated Freight Corridors, and the National Industrial Corridor Development. As many as 86% of respondents said these initiatives have positively influenced their business operations, while 95% reported improved access to logistics and transport infrastructure as a result. For 88% of respondents, the government’s infrastructure push has directly influenced capital investment decisions, signaling increased confidence to scale operations. For large enterprises, the impact is even sharper—94% say these upgrades have been pivotal in shaping their expansion plans.
While the infrastructure buildout has laid the groundwork for industrial expansion, government policies like the Production Linked Incentive (PLI) schemes and Make-in-India are shaping strategic priorities. Over 40% of respondents said these schemes have had the most significant impact on their business. Meanwhile, the National Logistics Policy (NLP) and National Industrial Corridor Development (NICD) were cited by 54% as being especially beneficial, particularly among MSMEs, for whom logistics accessibility and industrial park connectivity are key enablers.
Notably, 77% of the respondents felt that the ease of doing business had improved, with the figure rising to 86% among large-scale firms.
“India’s manufacturing sector is undergoing a structural shift. Our findings indicate a strong alignment between infrastructure investment, policy clarity, and industry intent. According to our survey, 88% of manufacturers are scaling up due to infrastructure-led confidence, and over 95% report improved logistics access through government-backed programs. Yet, to sustain this momentum, India must address deep-rooted cost and capacity gaps—especially in logistics, integrated facilities, and MSME productivity. Plug-and-play industrial parks, multimodal logistics networks, and improved land aggregation frameworks are not just enablers, they are essential levers for converting policy momentum into production ready outcomes,” said Gautam Saraf, Executive Managing Director, Mumbai & New Business, Cushman & Wakefield.
Sectoral Trends: What’s Powering Growth and Real Estate Implications
The report points to rising momentum in high-impact sectors such as automotive, engineering goods, electronics and chemicals. Simultaneously, third-party logistics (3PL) and FMCG operators are driving demand for Grade-A warehousing, buoyed by rapid consumption growth and the scaling of distribution networks.
This trend is already visible in the real estate landscape. An overwhelming 97% of respondents acknowledged a marked increase in quality warehousing supply, and 70% confirmed their organization’s readiness to expand into Tier II and III cities—enabled by improved infrastructure, multimodal access, and cost arbitrage benefits. Moreover, 81% indicated that they intend to expand their manufacturing or warehousing footprint within the next two to three years.
Structural Gaps Persist Despite Progress
Despite these advances, key hurdles remain. The report identifies four core challenges threatening India’s ability to sustain manufacturing growth:
- Logistics Costs Remain High: India still relies heavily on road transport (60% modal share), pushing per-tonne freight costs significantly above global averages. A lack of multimodal integration limits last-mile efficiency and warehouse connectivity.
- Warehousing Capacity Lags Global Benchmarks: Although 97% of respondents acknowledge improved availability of Grade-A warehousing, India still has only 0.2 sq. ft. of quality warehousing per urban resident, compared to 8.6 in China and 47.3 in the U.S.
- Low Value Addition*: India converts only 17% of manufacturing output into value-added, compared to 25% in China and 36% in South Korea —which means that most Indian factories are still piecing together imported components rather than generating high-value inputs at home.
*Value-Added/output ratio- the share of gross output that remains after subtracting all intermediate consumption (whether imported or domestic - Skills Gap Continues to Challenge Productivity: Only 39% of respondents said they have benefited from government-led skill development initiatives, with many citing a lack of alignment between training and job roles. This gap is particularly pronounced in MSMEs.
A Blueprint for Resilience
To address these gaps and support long-term growth, the report lays out a five-pronged strategy: accelerate the development of plug-and-play industrial parks; reassess the parameters that define MSME’s to foster scale; fast-track the rollout of multimodal logistics parks (MMLPs); invest in targeted skill development programs; and empower MSME exports through unified digital platforms and incentives.
Plug-and-play industrial parks, in particular, have emerged as a game-changing enabler. These pre-entitled, fully serviced zones drastically reduce setup time and capital costs—especially for MSMEs—allowing production to begin within weeks instead of months. With infrastructure like power, water, digital connectivity, and multimodal access already commissioned, companies benefit from faster time-to-market, operational efficiency, and significantly reduced risks. Union Budget 2025-26 has earmarked ₹2,500 crore for 12 such sector-specific parks, underscoring the government's commitment to catalyzing this model.
As manufacturers look to scale across newer geographies, such ready-to-operate zones are proving essential to translating policy momentum into production-ready capacity. Industry sentiment reflects this shift—93% of respondents reported improved operational efficiency in locations with modern parks and corridors.
The survey also reflects an overwhelming consensus on the need for continuity in government efforts. A resounding 94% of respondents stressed the importance of sustained infrastructure creation as essential to improving business outcomes.
As India positions itself as a credible global manufacturing alternative amid geopolitical shifts, the call for integrated policy execution and private sector preparedness has never been louder. Cushman & Wakefield’s report highlights the roadmap for India to bridge current gaps and unlock a new era of industrial growth.
“India’s manufacturing sector is at an inflection point—poised for accelerated growth driven by policy support and infrastructure improvements. A significant takeaway from our research is the rising importance of plug-and-play industrial parks. These pre-approved, infrastructure-ready zones are helping reduce time-to-market, lower upfront capital expenditure, and mitigate operational risks—especially for MSMEs looking to scale. As companies expand into new regions, their success will increasingly depend on access to such turnkey ecosystems that offer integrated logistics, skilled talent, and multimodal connectivity,” said Abhishek Bhutani, Managing Director, Logistics & Industrial Services India, Head- Gujarat, Cushman & Wakefield.