Infrastructure Sector in India
India requires investment worth Rs 50 trillion (US$ 777.73 billion) in infrastructure by 2022.

Indian Infrastructure- Industry Analysis

Latest update: July, 2018

  • Cumulative FDI inflows in the Construction Activities sector, which includes infrastructure, reached US$ 12.36 billion between April 2000 – December 2017.
  • Cumulative FDI inflows in the Construction Development sector, which includes townships, built-up infrastructure and construction- development projects, reached US$ 24.67 billion between April 2000 – December 2017.
  • In January 2018, the National Investment and Infrastructure Fund (NIIF) partnered with UAE-based DP World to create a platform that will mobilise investments worth US$ 3 billion into ports, terminals, transportation, and logistics businesses in India.
Growth

Notes: FDI – Foreign Direct Investment, * up to December 2017
Source: DIPP, Media sources, Aranca research

  • Value of total roads and bridges infrastructure in India is estimated to have expanded at a CAGR of 13.6 per cent over FY09–17 to US$ 19.2 billion
  • In Union Budget 2018-19, Rs 71,000 crore (US$ 10.97 billion) was allocated for national highways while Rs 19,000 crore (US$ 2.94 billion) was allocated to Pradhan Mantri Gram Sadak Yojana (PMGSY) for development of roads in rural and backward areas of the country.
  • Highway network in the country is expected to cover 50,0000 km by 2019. National highway construction in India increased by 20 per cent year-on-year in 2017-18.
  • In December 2017, the National Highway Authority of India (NHAI) created the National Highways Investment Promotion Cell (NHIPC) to attract foreign and domestic investments towards highway projects in India.
Growth

Notes: FY - Financial Year, F - Forecast
Source: Business Monitor International (BMI), Ministry of External Affairs, Union Budget 2018-19

 

Last Updated: July, 2018

The infrastructure sector has become the biggest focus area of the Government of India. Under Union Budget 2018-19, US$ 92.22 billion was allocated to the sector.

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.

The cumulative growth in the index of eight core industries was 4.7 per cent in 2017-18 and 4.1 per cent year-on-year in April-May 2018. Significant allocation to the infrastructure sector in the 12th Five-Year Plan, and investment requirement of US$ 1 trillion is expected to create huge demand for construction equipment in India. The country needs around 55 new airports by 2030 with an investment of US$ 36-45 billion. 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 a large number of private players entering the business through the public-private partnership (PPP) model. During the next five years, investment through PPP is expected to be US$ 31 billion. India has a requirement of investment worth Rs 50 trillion (US$ 777.73 billion) in infrastructure by 2022 to have sustainable development in the country.

Indian infrastructure sector witnessed 91 M&A deals worth US$ 5.4 billion in 2017. In the first half of 2018, infrastructure and real estate witnessed PE/VC deals worth 3.9 billion. All villages in India will be connected through a road network by 2019 under Pradhan Mantri Gram Sadak Yojana (PMGSY). In August 2017, a new Metro Rail Policy was announced to boost private investment in the sector. In January 2018, the National Investment and Infrastructure Fund (NIIF) partnered with UAE-based DP World to create a platform that mobilise investments worth US$ 3 billion into ports, terminals, transportation, and logistics businesses in India. The Government is also working on improving energy infrastructure in the country and investment opportunities worth US$ 300 billion will be available in the sector in the coming 10 years.

Indian Infrastructure Sector in India Industry Report (July, 2018)

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Indian Infrastructure Sector in India Industry Report (June, 2018)

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Click to access the Infrastructure Sector in India Industry Archived Report

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