Industrial real estate is the invisible engine powering India's growth. This piece explores why policy innovation in this sector is key to achieving India’s $5 trillion economic goal.

Revolutionising Industrial Real Estate: Why Policy Innovation is Essential for India's $5 Trillion Economy

During the 2020 pandemic, while offices, shops, and restaurants worldwide were shut down, one sector quietly kept the world moving -Industries. Warehouses, factories, and industrial operations remained active, ensuring that food, medicines, and online orders reached millions of people at the right time. From safeguarding supply chains to delivering essentials, industrial real estate proved to be the silent backbone of the global economy.

When people usually hear the term "industrial real estate," they picture smoky chimneys or huge factories. But this extends far beyond the black smoke and tall buildings. From the paper we write on to the clothes we wear, from the smartphones we use to the satellites and rockets revolutionising the space industry, it is enabled through Industrial Real Estate.

Industrial Real Estate (IRE) refers to properties specifically zoned and designed for industrial activities such as manufacturing, production, assembly, warehousing, logistics, distribution, and related operations.

Globally, research consistently shows that manufacturing remains indispensable for sustained national growth. A study by Haraguchi, Cheng, and Smeets (2017) affirms that "almost no country has achieved and sustained a high standard of living without making significant developments in its manufacturing sector."

Countries achieving sustained economic growth, such as China and Vietnam, have prioritized manufacturing as their fastest-growing sector. China's manufacturing value added (MVA) exceeds 30% of GDP, while most developing nations average 11–14%. Manufacturing drives economies of scale, technological advancement, and job creation, particularly in low-income countries. A study of 92 countries confirms manufacturing's superior contribution to economic growth over services, especially when bolstered by robust human capital

India's industrial sector contributes 27.6% to the nation's GDP, encompassing manufacturing, mining, construction, and utilities. The manufacturing sector alone accounts for 14.2%, underscoring its central role in economic development. With about 67.7 million people employed, manufacturing is nearly three times more productive than agriculture. In FY24, exports surpassed $435 billion, led by electronics, auto components, and chemicals.

India has long aspired to position itself as a global manufacturing hub, supported by national initiatives such as Make in India, Atmanirbhar Bharat, and a range of state-driven industrial programs. Despite these efforts, manufacturing currently accounts for only 13–14% of GDP, well below the targeted 25%.

It is to be noted that the key reason behind China's manufacturing dominance was its extensive network of world-class industrial zones, equipped with seamless infrastructure, robust logistics, and dependable utilities.

In an article written by Prof. Rohinton P. Medhora, Royal Bank Research Professor of Economics at the University of British Columbia, he states, "Today, taking into account India's jobs crisis, with a median population age of 28, the country must blend its service-sector strengths with manufacturing scalability. While schemes like PLI are a start, India needs to go further by incentivising private industry to scale up and undertaking bold land and labour regulatory reforms”.

In the context of India's economic priorities, Finance Minister Nirmala Sitharaman stated, "Scaling up manufacturing is essential to absorb a youthful workforce, reduce import dependencies and build competitive global supply chains".

Hence, the wheels of transformation are already in motion, and India is awakening to its manufacturing destiny.As a world, we have often been used to celebrating and acknowledging industries for driving growth, innovation, creating jobs, growing the Economy, etc. Still, the stakeholders that enable these industries are often forgotten.

Industries need land before any machine is installed and any product is rolled out! But not just any land. They need an ecosystem that is strategically located, infrastructure-ready, and well-zoned. They need an integrated ecosystem with logistics, utilities, talent, and policy stability.

As our Co-Managing Director, Mr.Suyash Surana, humbly expressed, we at Grand Magnum, embracing our role as an enabler of Make in India, are pioneering in policy innovation for Industrial Real Estate.

As one of the teams dedicated to this mission, not just developing land, we're here to nurture India's Industrial future with a deep commitment to our country, people, and industries.

As India wants to transition into a global manufacturing powerhouse, Grand Magnum is pioneering as a developer with a data-backed, insight-driven approach for INDUSTRIAL REAL ESTATE.

As India marches toward its $5 trillion economic ambition, we believe that industrial real estate policy innovation is not optional—it's essential!

Jai Hind!