“We expect that the government’s decision to encourage public-private partnership (PPP) across all Indian states to build a strong infrastructure pipeline using the PM Gati Shakti data will be equally extended to top tier 2 and 3 regions as well.” Aditi Kumar, Executive Director, TVS ILP
The Union Budget 2025 reinforces India’s commitment to infrastructure growth with the outlay of ₹1.5 lakh crore for states for infrastructure development. This will be key to strengthening the industrial and warehousing real estate sector. We expect that the government’s decision to encourage public-private partnership (PPP) across all Indian states to build a strong infrastructure pipeline using the PM Gati Shakti data will be equally extended to top tier 2 and 3 regions as well. This will enable the country to tap major industrial hotspots thereby building a strong national supply chain. Additionally, the partial credit enhancement scheme by National Bank for Financing Infrastructure and Development (NaBFID) for corporate bonds for infrastructure will support the MSMEs through improved credit access and working capital measures. These are commendable and timely as it will foster global competitiveness. Moreover, as rural connectivity is critical for integrating small businesses and MSMEs into the logistics network, the expansion of India post will enable faster movement of goods and last-mile deliveries thereby catering to heightened rural consumption levels.
Having said that, we believe that investment by domestic investors can be strengthened by offering tax-efficient infra bonds and extending Section 72A to real estate and infrastructure, reducing GST on construction materials, and easing Joint Development Agreement (JDA) taxation. As developers are increasingly investing in high-quality, technology-driven warehouses, encouraging sustainable, energy-efficient warehousing and allowing long-term leasing of government land will further strengthen the sector. With these measures, India is set to develop a future-ready warehousing ecosystem, with Tier-2 and Tier-3 cities leading the way while ensuring rural connectivity remains a key enabler of growth.
By Aditi Kumar, Executive Director at TVS ILP
