Construction Industry in India Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

Indian Construction Industry is segmented by Sector (Commercial Construction, Residential Construction, Industrial Construction, Infrastructure (Transportation) Construction, and Energy and Utility Construction). The report offers market size and forecasts for the Indian construction market in value (USD billion) for all the above segments.

Indian Construction Market Size

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India Construction Market Summary
Study Period 2020 - 2029
Base Year For Estimation 2023
Forecast Data Period 2024 - 2029
Historical Data Period 2020 - 2022
CAGR > 6.00 %
Market Concentration Low

Major Players

India Construction Market Major Players

*Disclaimer: Major Players sorted in no particular order

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Indian Construction Market Analysis

The size of India Construction market is around USD 639 billion in the current year and is anticipated to register a CAGR of over 6% during the forecast period.

  • Top property developers are planning launches of plots close to major cities as they seek to exploit a surge in demand in this segment during the pandemic.Post-Covid, Indians have realized the need for bigger spaces and, more importantly, open spaces. Naturally plotted houses have more open & breathable spaces, compared to an apartment.
  • Increase in population is demanding more space for accommodation, especially in tier 1 cities. To fulfill the demand, construction activities have been increased by both government bodies and private sector companies. In India, government is also emphasizing on the development of rural areas. These are the key factors that have been fueling the growth of the construction market.
  • The commercial real estate sub-sector is positioned for development as people return to workplaces and businesses adapt to hybrid working arrangements. As more companies send their workers back to work, there is a gradual rise in the need for commercial office space.
  • In Hyderabad, the plotted development has uniformly developed along the Outer Ring Road and is also growing along the major highways. Currently, the southern zone of Hyderabad witnesses' maximum traction for the residential land segment along the proposed Pharma City Corridor and international airport.The upcoming metro will enhance the connectivity of this part with the central and western zones. Micro markets such as Kothur, Shadnagar, and Maheshawaramhave taken the lead in demand for residential land in this zone. The rising interest in residential plots in Hyderabad in visible in the growth in land prices which have registered a 21 percent increase in prices after the pandemic which is the highest compared to the top-8 cities is also driving the construction market.

Indian Construction Market Trends

This section covers the major market trends shaping the India Construction Market according to our research experts:

Infrastructure projects drives the market

As part of the Sagarmala Program, more than 610 projects with a total cost of USD 10.5 million will be carried out between 2015 and 2035. These projects will focus on modernizing and building new ports, improving port connectivity, boosting port-linked industrialization, and building up coastal communities.

Bharatmala Pariyojana is a new highway umbrella program that focuses on improving the efficiency of freight and passenger movement across the country by bridging critical infrastructure gaps with effective interventions such as the development of Economic Corridors, Inter Corridors and Feeder Routes, National Corridor Efficiency Improvement, Border and International Connectivity Roads, Coastal and Port Connectivity Roads, and Green-field expressways.

In 2022-2023, the PM Gati Shakti Master Plan for Expressways will be implemented, allowing for faster transit. The National Highway network would be expanded by 25,000 kilometers in 2022-203, at a cost of INR 20,000 crore (USD 2417670).

In 2022, India's road sector experienced enormous growth as additional stretches of national highways were constructed, as well as the approval and completion of several projects and fundraises, making it a better year than the previous one. an integrated multi-modal national network of transportation and logistics, connectivity with isolated and difficult terrains; and decongestion of key sites on the road network.

The government approved the development of 21 greenfield airports in the country in January 2022. The country's largest airport will be built in Uttar Pradesh's Gautam Buddha Nagar area. The Ministry of Civil Aviation intends to build 21 additional airports across India in the next few years.

In the next four to five years, the Airports Authority of India (AAI) plans to create new airports as well as expand and upgrade many existing airports at a cost of USD 338 million. This comprises the expansion and alteration of existing terminals, the construction of new terminals, the expansion or strengthening of existing runways, technical blocks, aprons, and the control towers of the Airport Navigation Services. In addition, by 2025, three PPP (Public-Private Partnership) airports in Delhi, Bengaluru, and Hyderabad will have invested INR 30,000 crore in expansion plans.

India Construction Market- Estimated investments under National Infrastructure Pipeline (NIP)

Rising Residential Property Sales

In the first half of 2022, around 44 thousand housing units were sold in Mumbai, India's most demanding residential housing market. All the eight biggest metropolitan areas of India recorded a significant increase in housing sales, according to Knight Frank. Private market investor, Blackstone, which has significantly invested in the Indian real estate sector (worth Rs. 3.8 lakh crore (USD 50 billion), is seeking to invest an additional Rs. 1.7 lakh crore (USD 22 billion) by 2030.

Driven by increasing transparency and returns, there's a surge in private investment in the sector. Indian real estate attracted USD 5 billion in institutional investments in 2020, equivalent to 93% of transactions recorded in the previous year. The real estate segment attracted private equity investments worth Rs. 23,946 crores (USD 3,241 million) across 19 deals in Q4 FY21. In the first half of 2021, India registered investments worth USD 2.4 billion into real estate assets, a growth of 52% YoY.

Construction is the third-largest sector in terms of FDI inflow. FDI in the sector (including construction development & activities) stood at USD 54.17 billion from April 2000 to March 2022. According to a major property consultant, institutional investments in the Indian real estate sector are expected to increase by 4% to reach Rs. 36,500 crores in 2021, driven by the rising interest of investors towards capturing attractive valuations amid the pandemic.

The residential property market in the third quarter of 2022 has seen decent performance in the top cities in the country, both from the point of view of sales as well as new launches.The new launches of residential property were at 83,241 units in the July-September quarter which was an 11% rise year-on-year. However, sequentially, the sales in the third quarter fell 15% from 97,745 units in the preceding quarterBengaluru recorded the highest year-on-year growth in sales at 41%, an increase of 5% from the immediately preceding quarter whereas Pune witnessed a jump of 9% in sales

India Construction Market-Residential property sales

Indian Construction Industry Overview

The Indian construction market is highly competitive, owing to the presence of major local and international players. However, the market holds opportunities for small and medium players due to increasing government investments in the sector. The Indian construction market presents opportunities for growth during the forecast period, which is expected to further drive market competition. Large players are competing with each other for a large share of the Indian construction market. This makes it hard to see any consolidation in the market.

Indian Construction Market Leaders

  1. L&T

  2. Megha Engineering & Infrastructures Limited

  3. Tata Projects

  4. KEC International Limited

  5. Shapoorji Pallonji Co. Pvt. Ltd.

*Disclaimer: Major Players sorted in no particular order

India Construction Market Concentration
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Indian Construction Market News

  • March 2023: L&T has inked an MoU with Odisha-based non-profit SLS Trust for setting up a Skill Training Hub at Badampahar in Odisha's Mayurbanj district. This facility will comprise classrooms, state-of-the-art simulators, yards for practical training, and residential accommodation for the trainees.
  • November 2022: MEIL is building Mongolia's first greenfield oil refinery in Telangana. Megha Engineering & Infrastructures Limited (MEIL) has received a Letter of Award (LOA) for the Mongolia Refinery Project, which includes the construction of Mongolia's first oil refinery. MEIL will build EPC-2 (Open Art Units, Utilities & Offsites, Plant Buildings) and his EPC-3 (Captive Power Plants) in Mongolia at a cost of US$790 million. Engineers India Limited is the project management consultant for this G2G partnership project. The project is part of the 'Development Partnership Management' initiative of the Ministry of External Affairs, Government of India.

Indian Construction Market Report - Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

    1. 2.1 Analysis Methodology

    2. 2.2 Research Phases

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS

    1. 4.1 Current Economic and Construction Market Scenario

    2. 4.2 Technological Innovations in the Construction Sector

    3. 4.3 Insights into Supply Chain/Value Chain Analysis

    4. 4.4 Impact of Government Regulations and Initiatives on the Industry

    5. 4.5 Review and Commentary on the Extent of Government Infrastructure Development Schemes

    6. 4.6 Comparison of Key Industry Metrics of India with Other Countries

    7. 4.7 Comparison of Construction Cost Metrics of India with Other Countries

    8. 4.8 Impact of COVID-19 on the Market

  5. 5. MARKET DYNAMICS

    1. 5.1 Drivers

    2. 5.2 Restraints

    3. 5.3 Opportunities

    4. 5.4 Porter's Five Forces Analysis

      1. 5.4.1 Bargaining Power of Suppliers

      2. 5.4.2 Bargaining Power of Consumers/Buyers

      3. 5.4.3 Threat of New Entrants

      4. 5.4.4 Threat of Substitute Products

      5. 5.4.5 Intensity of Competitive Rivalry

  6. 6. MARKET SEGMENTATION

    1. 6.1 By Sector

      1. 6.1.1 Commercial Construction

      2. 6.1.2 Residential Construction

      3. 6.1.3 Industrial Construction

      4. 6.1.4 Infrastructure (Transportation) Construction

      5. 6.1.5 Energy and Utilities Construction

  7. 7. COMPETITIVE LANDSCAPE

    1. 7.1 Market Concentration Overview

    2. 7.2 Company Profiles

      1. 7.2.1 L&T

      2. 7.2.2 Megha Engineering & Infrastructures Limited

      3. 7.2.3 Shapoorji Pallonji Co. Pvt. Ltd

      4. 7.2.4 Tata Projects

      5. 7.2.5 KEC International Limited

      6. 7.2.6 Afcons Infrastructure Ltd

      7. 7.2.7 Dilip Buildcon Limited

      8. 7.2.8 Hindustan Construction Co. Ltd

      9. 7.2.9 NCC Limited

      10. 7.2.10 Lodha Group*

    3. *List Not Exhaustive
  8. 8. MARKET OPPORTUNITIES AND FUTURE TRENDS

  9. 9. MAJOR INFRASTRUCTURE DEVELOPMENT PROJECTS (PROJECT DESCRIPTION, VALUE, LOCATION, SECTOR, CONTRACTORS)

    1. 9.1 Existing Infrastructure

    2. 9.2 Ongoing Projects

    3. 9.3 Upcoming Projects

  10. 10. APPENDIX

  11. 11. DISCLAIMER

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Indian Construction Industry Segmentation

Construction is the installation, maintenance, and repair of buildings and other stationary structures, as well as the construction of roadways and service facilities that form fundamental components of structures and are required for their operation. 

The Indian Construction Market is segmented by Sector (Commercial Construction, Residential Construction, Industrial Construction, Infrastructure (Transportation) Construction, and Energy and Utility Construction). The report offers market size and forecasts for the Indian construction market in value (USD billion) for all the above segments.

By Sector
Commercial Construction
Residential Construction
Industrial Construction
Infrastructure (Transportation) Construction
Energy and Utilities Construction
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Indian Construction Market Research FAQs

The India Construction Market is projected to register a CAGR of greater than 6% during the forecast period (2024-2029)

L&T, Megha Engineering & Infrastructures Limited, Tata Projects, KEC International Limited and Shapoorji Pallonji Co. Pvt. Ltd. are the major companies operating in the India Construction Market.

The report covers the India Construction Market historical market size for years: 2020, 2021, 2022 and 2023. The report also forecasts the India Construction Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.

The key segments of the India Construction Market include a) Sector: Commercial Construction, Residential Construction, Industrial Construction, Infrastructure and Transportation Construction, Energy and Utility Construction b) Machinery: Earth Moving, Material Handling, Concrete and Road Construction c) Type: Building Construction, Heavy and Civil Engineering Construction, Specialty Trade Contractors, Land Planning and Development

Construction in India Industry Report

The Indian construction market is experiencing robust growth, driven by significant investments and government initiatives aimed at enhancing sectors such as commercial, industrial, infrastructure, energy and utilities, institutional, and residential construction. This surge is fueled by the need to support increasing urbanization and population growth, with each sector catering to specific project types from hotels and industrial parks to educational buildings and extensive transportation projects. The commercial construction sector in India benefits from a boom in tourism and business activities, while the industrial construction sector thrives on strong manufacturing activities. Infrastructure development in the construction industry in India is propelled by both public and private investments in transportation, whereas the energy and utilities construction sector is set for growth with a focus on renewable energy and achieving energy independence. Residential construction in India is also on the rise, supported by government efforts to mitigate housing deficits. The competitive landscape of the construction market in India features a diverse mix of domestic contractors and consultants. For detailed statistics, market share, size, and revenue growth insights into the construction sector in India, access a comprehensive market forecast and historical overview from Mordor Intelligence™ Industry Reports, available as a free report PDF download.

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Construction Industry in India Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)