According to a recent report published by Mordor Intelligence, India Infrastructure Sector Market size is expected to grow from USD 186.24 billion in 2023 to USD 294.12 billion by 2028, registering a CAGR of 9.57% during the forecast period (2022-2028). The growth story of India's infrastructure sector mirrors the nation's journey toward becoming an economic powerhouse. With a vast and diverse landscape, India's infrastructure development plays a pivotal role in driving economic growth, enhancing connectivity, and improving the overall quality of life for its citizens.
India's high growth imperative in 2023 and beyond will primarily be driven by major strides in key sectors, with infrastructure development being a critical force leading to economic progress. To achieve a USD 26 trillion economy, infrastructure investments and ease of doing business initiatives will play a pivotal role.
Transformative Transportation Networks
The rate of national highway construction has significantly increased in recent years, from an average of 12 kilometers per day in 2014–15 to about 29 kilometers per day in 2021–22. Highways now stretch 145,155 km, up from 97,830 kilometers in 2014. Additionally, the Pradhan Mantri Gramme Sadak Yojana has built more than 3.5 lakh km of rural roads in the past nine years, connecting villages in India with all-weather roads. Budgetary funding from the government for road infrastructure has significantly expanded, amounting to over INR1.4 lakh crore in FY22-23.
The railway system in India has seen extensive renovation and growth. Over the past four years, there has been an upward trend in capital spending on railway infrastructure, with a budget of 12.5 lakh crore approved in FY22-23, a 29% increase from the year before. Railway track electrification has advanced significantly during the past nine years, covering 37,011 route miles.
The government has also given its "in-principle" clearance for constructing 21 greenfield airports nationwide. The future greenfield Noida International Airport will also serve as the nation's primary facility for aircraft maintenance, repair, and operation (MRO) , supporting the aviation industry and creating jobs. The international Asian Development Bank (ADB) committed to investing USD 100 million in the government-sponsored National Investment and Infrastructure Fund (NIIF) in 2020. India needs foreign investments to boost economic growth to restore its ports, airports, and highways. One of the sectors with the largest foreign direct investment (FDI) is infrastructure.
Estimated investments under the National Infrastructure Pipeline (NIP) in India from the financial year 2020 to 2025 by sector:
Source: Department of Economic Affairs (India); NITI Aayog
Top Government Initiatives:
- PM Gati Shakti Scheme
- National Infrastructure Pipeline (INR 11 Lakh Crore)
- National Monetization Pipeline (INR 6 Lakh Crore)
- Bharatmala Pariyojana (26,000 km length of Economic Corridors)
- Changes in the HAM and fast pace of asset monetization
- National Logistics Policy, to provide a comprehensive initiative to improve the effectiveness of India's logistics ecosystem
- Mega Investment Textiles Parks (MITRA) scheme to establish seven world-class infrastructures in the textile sector, among others
Powering Progress through Energy Infrastructure
Switching to renewable energy is viewed to lower carbon footprint, reach net-zero goals, and reduce imports. The government strongly encouraged the adoption of electric vehicles , the production of green hydrogen, the manufacturing of solar equipment, and the development of energy storage in 2022 to accomplish its ambitious goal of 500 Gigawatts (GW) of renewable capacity by 2030. Investments worth USD 25 billion will be made in the renewable energy sector in 2023–2024.
Rural India's electrification holds great promise for bridging the nation's urban-rural divide and has several advantages for its citizens and the environment. India's per-person electricity consumption in 2021 was 920 kWh or around one-third of the Asian average. After declining by 5.9% in 2020, total energy consumption rose by 9% to 951 Mtoe in 2021. The country's electricity generation capacity is expected to reach 820 GW by 2030, with more than 500 GW coming from non-fossil fuel sources.
Crafting Smart Cities and Building Strong Digital Paths for the Future
The federal government, state governments, and urban municipal governments share equal duty for fund mobilization. Over the five years that the Mission originally intended to last, INR 1,000 billion has been allocated for the 100 cities. This amounts to almost INR2 billion per city annually. By promoting advances in urban design, waste management, energy efficiency, and public services, the project is helping to put Indian cities on the map of the world's smart cities. India has emerged as a global leader in mobile connection due to the revolution in telecommunications infrastructure. Digital empowerment has been made possible by the increasing use of smartphones and the growth of Internet services, revolutionizing how people access information, services, and opportunities.
The inflows in the townships, construction development projects, and housing verticals were estimated at USD 25.5 billion during the financial years (FY) 2000 and (FY) 2019. "Smart Cities Mission". Programs like "Housing for All" have profited from these endeavors.
Financing for the Smart Cities Mission (2015-16 to 2019-20):
|
Financial Item |
Amount (INR Billion) |
|
Total Fund Requirement |
2,050 |
|
Financial Support by Central Government |
480 |
|
Matching funding by the State Government |
480 |
|
Total Funds mobilized by State and Central |
960 |
|
Funds allocated for each city per year |
2 |
|
Balanced funds to be mobilized from other sources |
1090 |
Source: Ministry of Housing and Urban Affairs.
The infrastructure market in India is well-positioned for future expansion and change. Sustainable development may be facilitated by the government's resolve to fund significant projects and by creative funding schemes. Adopting cutting-edge technologies like blockchain, loT, and AI can improve productivity and effectiveness across numerous infrastructure areas.
Major Developments in India's Infrastructure Construction Market:
The Indian government has prioritized improving its infrastructure to match its growing economy. To transform India into a developed nation by 2047, Prime Minister Narendra Modi has emphasized the importance of investing in infrastructure. Various upcoming infrastructure projects have been identified as essential to the country's growth.
Mumbai-Ahmedabad High-Speed Rail Project -The Mumbai-Ahmedabad High-Speed Train Project is a significant infrastructure improvement that intends to provide a high-speed train link between Mumbai and Ahmedabad. This collaborative initiative between the governments of India and Japan is anticipated to cost roughly INR 1.1 trillion and will travel 508 kilometers at a top speed of 350 km/h. Once finished, it will take 2 hours to travel from Mumbai to Ahmedabad instead of the current 7 hours.
Navi Mumbai International Airport - The Navi Mumbai International Airport in India is expected to expand to be one of the nation's biggest airports due to the rising demand for air travel in Mumbai and the areas around it. The airport is projected to cost INR167 billion and will cover an area of approximately 1,160 hectares. With the capacity to handle up to 60 million passengers annually, the airport is a significant infrastructure project.
Delhi-Mumbai Industrial Corridor (DMIC) - A vital infrastructure project to establish an international industrial zone in India is the Delhi-Mumbai Industrial Corridor (DMIC). Six new industrial cities are part of the proposal, spanning around 1,483 kilometers and including a designated goods route. The undertaking, which is projected to cost roughly INR 9.5 trillion, is intended to strengthen India's manufacturing industry.
Sagarmala Project- A large project called the Sagarmala Project aims to develop India's coastline and improve its maritime infrastructure. The project involves building new ports, modernizing existing ports, and creating multiple coastal economic zones. It is anticipated to cost INR 8.5 trillion and have a coverage distance of about 7,500 km.
Bharatmala Pariyojana - The project will comprise building new roadways and enlarging existing ones, covering a distance of about 83,677 km. The project will enhance connectivity throughout the nation and is anticipated to cost roughly INR 5.35 trillion.
Key Players and Competition in the India Infrastructure Construction Market
The Indian infrastructure construction market is highly competitive and diverse. Some major players traditionally active in the Indian infrastructure construction market include.
- Larsen & Toubro (L&T)
- Reliance Infrastructure
- Adani Infrastructure
- GMR Infrastructure
- Tata Projects
- Essar Group
- Hindustan Construction Company
- Gammon India
- IRB Infrastructure Developers
Learn More
For more information about this fast-growing market, have a look at India Infrastructure market, a 390-page report with detailed insights on market trends, dynamics, segmentation, competitive landscape, and company profiles of key Infrastructure building companies.
