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Indian Roads Analysis

August, 2013

India has the second largest road network in the world, spanning a total of 4.7 million kilometres. Roads in India bear about 85 per cent of the country's passenger traffic and 60 per cent of freight traffic.

The value of total roads and bridges infrastructure is expected to touch US$ 19.2 billion by 2017. The key factors responsible for driving demand in the sector have been the rise in two-wheeler and four-wheeler vehicles and increasing freight traffic. Rising per-capita incomes and a growing middle class coupled with easier access to finance and a wider price range of vehicles have boosted car sales. During 2007-14, the sales of passenger and commercial vehicles are expected to increase at a compounded annual growth rate (CAGR) of 15 and 13.5 per cent to touch 3.5 and 0.85 million respectively.

Infrastructure spending by the government is expected to touch US$ 1 trillion in the next Five-Year Plan (FY13-17). To promote the sector, the government has allowed 100 per cent foreign direct investment (FDI) under the automatic route. Development of national highways through Public-Private Partnership (PPP) is expected to remain the key focus area for the government. During the next five years, investments through PPP are expected to be over USD41 billion for national highways and around USD10 billion for state highways.

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