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Infrastructure Sector in India
GOI allocated Rs. 111 lakh crore (US$1.4 trillion) under the NIP for FY2019-25. Sectors such as energy, roads, urban and railways amount to ~71% of the projected infrastructure investments in India.

Infrastructure Sector in India

    Last updated on Dec, 30 2020

Indian Infrastructure Sector in India Industry Report  (Size: 666.64 KB ) (November, 2020)


Infrastructure sector is a key driver for the Indian economy. The sector is highly responsible for propelling India’s overall development and enjoys intense focus from Government for initiating policies that would ensure time-bound creation of world class infrastructure in the country. Infrastructure sector includes power, bridges, dams, roads, and urban infrastructure development. India was ranked 44 out of 167 countries in World Bank's Logistics Performance Index (LPI) 2018. India ranked second in the 2019 Agility Emerging Markets Logistics Index.

Market Size

According to the Department for Promotion of Industry and Internal Trade (DPIIT), construction development and infrastructure activities sectors received FDI inflow amounting to US$ 25.69 billion and US$ 16.97 billion, respectively, between April 2000-June 2020. The logistics sector in India is growing at a CAGR of 10.5% annually and is expected to reach US$ 215 billion in 2020.


India requires investment worth Rs. 50 trillion (US$ 777.73 billion) in infrastructure by 2022 to have sustainable development in the country. India is witnessing significant interest from international investors in the infrastructure space. Some of the key investments made in the sector are listed below:

  • Large investment in infrastructure has seen momentum as overall PE (private equity)/VC (venture capital) investment touched an all-time high of US$ 14.5 billion in 2019.
  • The largest deal was done by Abu Dhabi Investment Authority, Public Sector Pension Investment Board and National Investment and Infrastructure Fund as they made investment worth US$ 1.1 billion in GVK Airport Holdings Ltd.
  • In FY20, the cumulative growth of eight core industries stood at 0.6%.
  • As on 31 March 2019, 26.02 million households got electricity connection under the Saubhagya Scheme.
  • In 2019, infrastructure sector witnessed seven merger and acquisition (M&A) deals worth US$ 1,461 million.
  • In September 2020, Ministry of Petroleum & Natural Gas announced that it aims to operate 50% of fuel stations, which are owned by public sector oil companies, using solar power within five years—under the government's green energy drive.
  • In November 2020, Warburg Pincus-backed logistics real estate firm, ESR India signed an agreement with the Maharashtra government to invest Rs. 4,310 crore (US$ 578.88 million) to set up 11 industrial and logistics parks around Mumbai and Pune.


Government Initiatives

The Government of India is expected to invest highly in the infrastructure sector, mainly highways, renewable energy, and urban transport.

  • In April 2020, the Government set a target of constructing roads worth Rs. 15 lakh crore (US$ 212.80 billion) in the next two years.
  • In May 2020, Border Roads Organisation (BRO) achieved major milestone by digging up a 440-metre long tunnel below the busy Chamba town on Rishikesh-Dharasu road Highway (NH 94).
  • Indian energy sector is expected to offer investment opportunities worth US$ 300 billion over the next 10 years.
  • NHAI will be able to generate revenue of Rs. one lakh crore (US$ 14.31 billion) from toll and wayside amenities over the next five years.
  • In the Union Budget 2020-21, the Government has given a massive push to the infrastructure sector by allocating Rs. 1,69,637 crore (US$ 24.27 billion) to develop the transport infrastructure.
  • Communication sector has been allocated Rs. 38,637.46 crore (US$ 5.36 billion) to develop post and telecommunications departments.
  • Indian Railways has received an allocation of Rs. 72,216 crore (US$ 10.33 billion) under Union Budget 2020-21.
  • Ministry of Housing and Urban Affairs received an allocation of Rs. 50,040 crore (US$ 6.85 billion) under the Union Budget 2020-21.
  • In October 2020, the Government of India invited proposals to install charging infrastructure on major highways and expressways in the country
  • In October 2020, The Central Government awarded a total of 322 projects to construct 12,413 km roads under the 'Bharatmala Pariyojana'.
  • In October 2020, NITI Aayog and Quality Council of India (QCI) launched the ‘National Program and Project Management Policy Framework’ (NPMPF), envisaged to bring radical reforms in the way infrastructure projects are executed in India.
  • In October 2020, the government announced a plan to set up an inter-ministerial committee under NITI Aayog to forefront research and study on energy modelling. This, along with a steering committee, will serve the India Energy Modelling Forum (IEMF) jointly launched by NITI Aayog and the United States Agency for International Development (USAID).
  • In October 2020, the Ministry of Housing and Urban Affairs (MoHUA) launched an affordable rental housing complex portal.


Following are the achievements of the Government in the past four years:

  • In 2019, the sector witnessed seven merger and acquisition (M&A) deals worth US$ 1,461 million.
  • In March 2020, NHAI accomplished the highest ever highway construction of 3,979 km of national highways in FY20. 
  • Freight earnings in FY20 (till February 2020) stood at Rs. 119,216.11 crore (US$ 17.06 billion), while its gross revenue stood at Rs. 183,092.74 crore (US$ 26.20 billion) during the same period.
  • Cargo traffic handled stood at 707.4 million tonnes (MT) in FY20.
  • Electricity production in India reached 1,252.61 BU in FY20.
  • The largest PE investment witnessed was the acquisition of Pipeline Infrastructure India by Canadian asset management firm Brookfield’s for US$ 1.9 billion in Q12019.
  • India’s rank jumped to 22 in 2019 from 137 in 2014 on World Bank’s Ease of doing business - "Getting Electricity" ranking.
  • Energy deficit reduced to 0.7% in FY20 from 4.2% in FY14.

Road Ahead

The infrastructure sector has become the biggest focus area for the Government of India. India plans to spend US$ 1.4 trillion on infrastructure during 2019-23 to have a sustainable development of the country. The Government has suggested investment of Rs. 5,000,000 crore (US$ 750 billion) for railways infrastructure from 2018-30.

India and Japan have joined hands for infrastructure development in India's Northeast states and are also setting up an India-Japan Coordination Forum for Development of Northeast to undertake strategic infrastructure projects for the region.

References: Media Reports, Press releases, National Infrastructure Pipeline, Union Budget 2019-20, Ministry of Commerce and Industry, Economic Survey-2019-20

Note: Conversion rate used in April 2020, Rs. 1 = US$ 0.013123

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

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