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Trade Uncertainty Boosts Industrial Growth in India and Southeast Asia

Supply Chain Management

Business Honor
01 May, 2025

Diversification of supply chains drives demand for commercial real estate in Asia-Pacific.

As global trade policies keep changing, industries that are export-dependent on US trade are exposed to growing threats, especially because of tariff shifts and possible trade wars. Still, a recent study by international real estate company Cushman & Wakefield indicates that such uncertainty is favoring India and Southeast Asia's industrial hubs and commercial real estate.

The report underlines how the trade policies of the US, especially in President Donald Trump's first term, compelled most businesses to rethink their supply chains. With tariffs applied on China and the "China +1" strategy, production has started increasing throughout the Asia-Pacific region with manufacturing operations shifted to nations such as India, Indonesia, and the Philippines. This transformation in manufacturing has created an industrial production boom and rising demand for commercial property in these areas.

As per the report, demand for office buildings in major markets such as India and Southeast Asia continues to be robust, with office space absorption in the Asia-Pacific market increasing by 20% year-on-year. During the first quarter of 2025 alone, the net absorption of office space in the region was approximately 26 million square feet.

Dr. Dominic Brown, Cushman & Wakefield's Head of International Research, noted that despite the uncertainty in global trade, Asia-Pacific's firm economic fundamentals are helping to mitigate the impact. Although the first 100 days of the second term of President Trump brought huge instability to international markets, the real estate markets of Asia-Pacific have remained resilient, with ongoing investment and activities.

In summary, in spite of the uncertainties in global trade, the current diversification of Asian supply chains, especially in India and Southeast Asia, is giving a boost to the industrial and real estate sectors of the region.