Trade Analytics
Infrastructure Sector in India
India is expected to become the third largest construction market globally by 2022.

Indian Infrastructure- Industry Analysis

Latest update: December, 2019

Growth

 

Last Updated: December, 2019

Increased impetus to develop infrastructure in the country is attracting both domestic and international players. Private sector is emerging as a key player across various infrastructure segments, ranging from roads and communications to power and airports. In order to boost the construction of buildings in the country, the Government of India has decided to come up with a single window clearance facility to accord speedy approval of construction projects. In 2018, India was ranked 44th out of 167 countries in World Bank's Logistics Performance Index (LPI) 2018. India was also ranked second in the 2019 Agility Emerging Markets Logistics Index.

During April-September 2019, the cumulative growth of the eight core industries is 1.3 per cent. In the road’s sector, the government’s policy to increase private sector participation has proved to be a boon for the infrastructure industry with many private players entering the business through the public-private partnership (PPP) model. India is expected to become the third largest construction market globally by 2022. India plans to spend US$ 1.4 trillion on infrastructure in the next five years to have sustainable development in the country.

Large investment in infrastructure have provided momentum to overall PE/VC investments into India which touched an all-time high where infrastructure recorded US$ 4.8 billion during November 2019 accounting 43 per cent of all the investment of the month. All villages in India will be connected through a road network by 2019 under Pradhan Mantri Gram Sadak Yojana (PMGSY) also to upgrade the 1,25,000 kms of road length over the next five years, the estimated cost of Rs 80,250 crore (US$ 12.03 billion) is envisaged under Pradhan Mantri Gram Sadak Yojana-III (PMGSY).  Road building in India has become the second cheapest in Asia. In August 2017, a new Metro Rail Policy was announced to boost private investment in the sector. Metro rail network has touched 657 Km. 

As per Union budget 2019-20, Metro rail network has touched 657 Km and Ministry of Railways have been allocated Rs 94,071 crores (US$ 13.46 billion) in 2019-20. The Government is also working on improving energy infrastructure in the country and investment opportunities worth Rs 20,96,700 crore (US$ 300 billion) will be available in the sector in the coming 10 years.

National highway construction sets a record of 31.87 km per day in December 2018. NHAI will be able to generate revenue of Rs 1 lakh crore (US$ 14.31 billion) from toll and wayside amenities over the next five years.

The infrastructure sector has become the biggest focus area of the Government of India. Under Union Budget 2019-20, Rs 4,41,704.8 crore (US$ 63.20 billion) was allocated to the sector. As per Union budget 2019-20, investment of Rs 5,000,000 crore (US$ 750 billion) is needed for railways infrastructure between 2018-30.  In the Union Budget 2019-20, the Government of India has given a massive push to the infrastructure sector by allocating Rs 24,000 crore (US$ 3.4 billion) for the sector.  For 2019-20, budgetary allocation for Ministry of Development of North Eastern Region has been increased to Rs 3,000 crore (US$ 429.25 million) as compared to Rs 2,629 crore (US$ 376.16 million) in 2018-19.

According to Department for Promotion of Industry and Internal Trade (DPIIT), construction development sector and infrastructure activities sector received FDI inflows amounting to US$ 25.31 billion and US$ 15.78 billion, respectively from April 2000 to September 2019.

Indian Infrastructure Sector in India Industry Report (December, 2019)
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