As demand for Grade-A logistics facilities rises along key highways, Kolkata’s warehouse market adapts to structural constraints with a focus on smaller, modern projects, supported by upcoming infrastructure developments.
Kolkata’s warehouse market is tilting towards higher-grade space as FMCG groups and e-commerce operators expand their networks across eastern India, according to industry reports on the city’s logistics sector. The shift is most visible in demand for Grade-A facilities, which offer better compliance, loading efficiency and modern handling systems than older stock.
Leasing activity has also become more concentrated along National Highway 19 and National Highway 16, where occupiers are drawn by stronger connectivity and more usable infrastructure. Knight Frank India said the National Highway 16 corridor increased its share of the market in 2025, while Dankuni and surrounding areas remained the main logistics hub because of their road links and labour access.
Even so, the market is being held back by structural constraints. High land prices and limited availability of suitable plots have made it harder to develop the large, master-planned logistics parks seen in other Indian cities. As a result, developers are focusing on smaller, strategically placed Grade-A projects rather than sprawling warehouse campuses.
The broader market backdrop remains resilient despite a slowdown in transactions last year. Knight Frank India said Kolkata warehousing leasing fell 30% in 2025 to 4.6 million square feet, down from 6.5 million square feet a year earlier, but attributed the decline to supply-side pressures rather than weakening demand. 3PL providers and e-commerce firms remained the biggest sources of leasing, while manufacturing gained share. The consultancy said rentals held steady, suggesting occupiers still have confidence in the market.
Attention is now turning to infrastructure projects that could unlock the next phase of growth. Among the key developments being watched are the proposed multimodal logistics hub in Dankuni and progress on land acquisition for the Eastern Dedicated Freight Corridor. Analysts say these could help Kolkata move closer to the larger, more standardised logistics model that has become common in other industrial centres.
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