Q1 2026 opened against one of the most severe global supply chain disruptions in recent memory. The US-Israel military campaign against Iran, launched in late February, triggered the effective closure of the Strait of Hormuz, through which roughly 20% of the world’s seaborne oil and LNG volumes transit, with major carriers including Maersk, CMA CGM and Hapag-Lloyd suspending operations through the strait entirely. Shipping companies were forced to reroute vessels, delay deliveries or suspend operations, causing a slower and materially more expensive global supply chain. Against this backdrop, the Indian rupee depreciated approximately 9% over FY 2026, reaching around INR 93.88 per USD. Sustained dollar demand from oil importers widened the current account deficit and raised landed costs for USD-denominated freight and equipment procurement, compressing margins across the logistics sector. Yet India’s macroeconomic foundations held firm. FY 2026 real GDP growth forecast came in at 7.6%, outperforming expectations, and the RBI has projected FY 2027 growth at 6.9%, supported by strong services sector activity, robust domestic consumption and ongoing GST rationalisation benefits, even as the RBI flagged downside risks from further geopolitical escalation.
Against this backdrop, industrial and warehousing activity remained buoyant, driven primarily by Manufacturing and Third-Party Logistics (3PL) occupiers, reinforcing India’s position as a resilient and strategically located hub for regional supply-chain diversification. Occupier activity continued to strengthen despite the volatile macroeconomic environment, with leasing volumes reaching 1.8 mn sq m (19.3 mn sq ft) in Q1 2026, reflecting a 15% YoY increase. Notably, this marks the second-highest quarterly transaction volume recorded since the beginning of 2023, underscoring sustained occupier confidence and strong underlying market momentum.
