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September, 2011


Infrastructure Industry in India has been witnessing rapid growth in its different sectors with the growing urbanization and the increasing rate of foreign investments in this field. The Indian government has taken various initiatives to develop the infrastructure sector. Liberalisation of Foreign Direct Investment (FDI) regulations, extended tax holiday periods and introduction of Public Private Partnership (PPP) are some of the factors that have led to the growth of infrastructure sector in India.

The major Infrastructure development initiatives require a substantial inflow of investment capital. The policies of the Indian Government seek to encourage investments in domestic infrastructure from both local and foreign private capital. The country is a hot destination for foreign investors.

Some of the top infrastructure companies that are involved in infrastructure activities in India include Larsen &Toubro Ltd, Punj Lloyd Group, Lanco Infratech Limited and GMR Group to name a few.

Indian Roads

The road infrastructure in India plays an important role in connecting different parts of India. Over the years after independence there has been large-scale development of the network of roads across the length and breadth of the country.

Indian road network of 3.3 million Kilometers is second largest in the world and consists of:

Indian road network
Length(In Km)
Expressways 200
National Highways 70,934
State Highways 1,31,899
Major District Roads 4,67,763
Rural and Other Roads 26,50,000
Total Length 33 Lakhs Kms (Approx)
Sources: National Highways Authority of India

The growing interest by private players in the highways sector has assisted National Highway Authority of India (NHAI) to award 17 projects worth over Rs 25,500 crore (US$ 5.15 billion) in the past few months. Of the 17 projects, 12 were won by private firms at premium since April 2011, according to a senior Road and Transport Ministry official. All these projects will be built under National Highways Development Project (NHDP), the flagship road building programme of the Transport Ministry.

Under NHDP, the NHAI has developed about 16,000 km, while process for improvement of another 10,000 km is still going on. All the seven phases of NHDP will cover upgradation of about 50,000 km of roads.

Indian Ports

India has a more than 7,500 km-long coastline, which is being further developed to support trade. The Government of India (GoI) is focussing on port infrastructure development in the country and is also promoting private participation and foreign direct investment (FDI). Most of the cargo ships that pass through East Asia and America, Europe or Africa, pass through Indian territorial waters. Hence, India has the potential to develop itself as a transshipment hub.

There are 12 major ports in India and approximately 200 non-major ports. In 2008–09, the total cargo handling capacity of major ports was 574.5 million tonnes per annum (MTPA). The capacity of major ports is further anticipated to increase to 1,000 MTPA by 2011–12. Non-major ports are projected to more than double their capacity by the end of 2007–12, to support major ports in handling the growing cargo traffic.

Recently, Belgium's Port of Antwerp, the second largest port in Europe, announced its plans to pick a stake in Essar Group's Hazira Port in Gujarat by the end of 2011.

Indian Airports

India is one of the fastest growing aviation markets in the world. With the liberalisation of the Indian aviation sector, the industry has seen transformation with the entry of the privately owned full service airlines and low cost carriers. The sector has also seen a noteworthy increase in number of domestic air travel passengers. Some of the factors that have led to higher demand for air transport in India include the growing middle class and its purchasing power, low airfares offered by low cost carriers, the growth of the tourism industry in India, growing outbound travel from India, and the overall economic growth of India. In addition to these factors, the importance on modernization of non-metro airports, fleet expansion by airlines, service expansion by state owned carriers, development of the maintenance, repair and overhaul (MRO) industry in India, opening up of new international routes by the Indian government, establishment of new airports and renovation and restructuring of the existing airports have further led to growth of the industry.

India's domestic aviation market has tripled in the last five years, according to a latest report of the International Air Transport Association (IATA).

According to a report “Indian Aerospace Industry Analysis”, by research firm RNCOS, India is at present the ninth largest aviation market in the world, the government's open sky policy has attracted many foreign players to enter the market and the industry is growing in terms of both the players and the number of aircrafts. Given the strong market fundamentals, it is expected that the civil aviation market will register more than 16 per cent Compound annual growth rate (CAGR) during 2010-2013.