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The Government of India has allocated Rs. 111 lakh crore (US$ 13.14 billion) under the National Infrastructure Pipeline for FY 2019-25. The Roads sector is expected to account for 18% capital expenditure over FY 2019-25

Road and Infrastructure Industry Analysis

    Last updated on Oct, 11 2021

India has the second-largest road network in the world, spanning a total of 5.89 million kilometres (kms).

Private sector has emerged as a key player in the development of road infrastructure in India. Increased industrial activities, along with increasing number of two and four wheelers have supported the growth in road transport infrastructure projects. 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. In FY21, there were 125 PPP projects worth US$ 23.25 billion in India.

With the Government permitting 100% Foreign Direct Investment (FDI) in the road sector, several foreign companies have formed partnerships with Indian players to capitalise on the sector's growth. Cumulative FDI in construction development^ stood at US$ 25.93 billion between April 2000 and December 2020. The Government’s move to cut GST rates on construction equipment from 28% to 18% is expected to give boost to the industry.

The Government of India has allocated Rs. 111 lakh crore (US$ 1.4 trillion) under the National Infrastructure Pipeline for FY 2019-25. The roads sector is likely to account for 18% capital expenditure over FY 2019-25.

In August 2021, Union Minister of Road Transport Highways, Mr. Nitin Gadkari announced to launch 1,080-km (road construction) projects worth Rs. 25,370 crore (US$ 3.4 billion) in Gujarat under the Bharatmala Pariyojana—the ambitious road and highways project that aims to build highways from Maharashtra, Gujarat, Rajasthan, Punjab, Haryana and then cover the entire string of Himalayan territories.

In July 2021, the Ministry of Road Transport and Highways granted 162 kms road highway (New NH-365BG), as part of the economic corridor under the Bharatmala Pariyojana, with an aim to connect Andhra Pradesh and Telangana via a robust road infrastructure that supports speed of 100kms/hour. The total project cost is Rs. 2,600 crore (US$ 350 million).

In July 2021, Andhra Pradesh will spend US$ 296.05 million to build 8,970 kms of roads.

In June 2021, the Ministry of Road Transport and Highways constructed 2,284 kms of national highways compared with 1,681 kms in June 2020.

The Minister for Road Transport & Highways and Micro, Small and Medium Enterprises, Mr. Nitin Gadkari, is targeting to construct 40 kms per day in FY22.

As per the Ministry of Road Transport and Highways, national highway construction hit an all-time high of 37 km per day in FY 2020-21.

In December 2020, Mr. Nitin Gadkari, Union Minister of Road Transport and Highways inaugurated the three lane 1.5 km long Koilwar bridge over Sone river in Bihar.

In December 2020, Union Minister of Road Transport and Highways, Mr. Nitin Gadkari laid foundation stones for 15 National Highways projects with a total length of 266 kms, worth Rs. 4,127 crore (US$ 560.88 million) in Nagaland.

Under Pradhan Mantri Gram Sadak Yojana (PMGSY), in the UT of Jammu & Kashmir, 3,261 roads of length of 19,277 kms and 243 bridges have been sanctioned, out of which 1858 roads of length 11,517 kms and 84 bridges have been completed. Similarly, in the UT of Ladakh, 142 roads of length of 1207 kms and 3 bridges have been sanctioned, out of which 96 roads of length 699 kms and 2 bridges have been completed until July 2020.

Under the Union Budget 2021-22, the Government of India has allocated Rs. 108,230 crore (US$ 14.85 billion) to the Ministry of Road Transport and Highways.

In January 2021, the Government of India and New Development Bank (NDB) signed two loan agreements for US$ 646 million for upgrading the state highway network and district road network in Andhra Pradesh.

In December 2020, the MoRTH proposed to develop additional 60,000 kms of national highways (in the next five years), of which 2,500 kms are expressways/access controlled highways, 9,000 kms are economic corridors, 2,000 kms are coastal and port connectivity highways and 2,000 kms are border road/strategic highways. The ministry also intends to improve connectivity for 100 tourist destinations and construct bypasses for 45 towns/cities.

Note: TOT - toll operate transfer, * - investments include Budgetary support, IEBR refers to Internal and Extra Budgetary Resources and constitutes the resources raised by the public sector units through profits, loans and equity and Private sector investments; according to Ministry of Road Transport and Highways, ^ - FDI in construction development Includes: Townships, housing, built-up infrastructure and construction-development projects

Indian Road Industry Report (July, 2021)
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Click to access the Road Industry Archived Report

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