India’s manufacturing at 14-month high in 2025

New Delhi

India’s manufacturing sector reached a 14-month high in June 2025, even as Asia-Pacific logistics rents stayed mostly flat in the first half of the year, according to a Knight Frank report. India’s S&P Purchasing Managers' Index (PMI) hit 58.4, the strongest in the region, driven by rising exports, higher production, and record employment growth.

India’s manufacturing growth has helped push logistics rents up by 3.4%, compared to 2.1% six months earlier, despite an increase in vacancies across major logistics hubs. Knight Frank India’s Chairman Shishir Baijal credited this to a rebound in manufacturing, continued policy support, and strong occupier demand.

Baijal added that India’s growing infrastructure base and cost advantage make it an attractive alternative as global companies restructure supply chains. Meanwhile, rents in China continued to fall, and rental growth slowed in Australia and Southeast Asia. Overall, the Asia-Pacific rent index dipped slightly by 0.4% year-on-year.

Knight Frank’s report noted that much of the region’s current stability could be due to early shipments ahead of expected tariff hikes, raising questions about occupier demand in the near future.

Tim Armstrong, Knight Frank’s Global Head of Occupier Strategy, said companies are now restructuring real estate portfolios to support resilient, regional supply chains. This includes setting up distribution hubs, locating near ports or transport networks, and combining logistics infrastructure with office and support facilities.

While logistics markets have remained steady, upcoming trade policies may shift inventory strategies and affect regional demand.