The private sector has emerged as a key driver in the development of road infrastructure in India, supported by growing industrial activity and rising ownership of two and four-wheelers. The Government’s policy of encouraging private participation has been a boon for the infrastructure industry, leading to significant adoption of the public-private partnership (PPP) model. In line with the Union Budget 2025–26, the Ministry of Road Transport and Highways (MoRTH) has identified a public-private partnership (PPP) pipeline covering 13,400 km of highways, with an estimated investment of Rs. 8.3 lakh crore (US$ 94.3 billion) over the next three years, highlighting the government’s continued focus on private sector participation and infrastructure-led growth.
In a major step toward strengthening connectivity, the Union government has approved eight national high-speed corridor projects covering 936 kilometres at a cost of Rs. 50,655 crore (US$ 6.09 billion). Alongside, the government is promoting future-ready infrastructure with a pilot project worth Rs. 600 crore (US$ 68.64 million) to establish green hydrogen fuel facilities on 10 selected highway stretches. This initiative will evaluate the feasibility of hydrogen supply for commercial vehicles and set standards for fuelling and storage.
In May 2026, the National Highways Authority of India (NHAI) finalized a tentative list of 17 National Highway projects spanning 1,692.5 km across nine states for monetisation under the Toll-Operate-Transfer (ToT) and Infrastructure Investment Trust (InvIT) models during FY2026–27. The initiative aims to unlock value from operational highway assets, mobilise capital for further infrastructure development, promote private sector participation, and accelerate the expansion and modernisation of the National Highway network.
In May 2026, the Centre approved 121 rural road projects covering 652.61 km under PMGSY-IV Batch II in the Udhampur–Kathua parliamentary constituency, with an investment of Rs. 1,524 crore (US$ 171.76 million) to improve rural connectivity and connect 138 habitations
In May 2026, the Government allocated an additional Rs. 2,000 crore (US$ 211.91 million) for National Highway projects in Northeast India, increasing the NH(O)-NE outlay to Rs. 3,500 crore (US$ 370.84 million) to accelerate road infrastructure development and improve regional connectivity.
In April 2026, the Government introduced a temporary cost escalation compensation mechanism for National Highway projects by revising price adjustment norms and enabling monthly payments under EPC and HAM contracts for three months till June 2026. The initiative is expected to improve contractor liquidity and ensure uninterrupted project execution.
In April 2026, the Ministry of Road Transport and Highways (MoRTH) revised construction timelines for National Highway projects, allowing execution periods of up to six years for complex projects to improve project planning and timely delivery
Expansion plans are ambitious. India is preparing to upgrade 25,000 km of two-lane highways to four lanes at Rs. 10,00,000 crore (US$ 117 billion) and 16,000 km of four-lane highways to six lanes at Rs. 6,00,000 crore (US$ 69.93 billion). Detailed project reports are being prepared, with work expected to commence by 2027.
Vehicle demand continues to support growth. During FY26, India’s automobile sector witnessed strong domestic demand, with total sales reaching 28.27 million units. The growth was primarily driven by two-wheelers (21.71 million units), followed by passenger vehicles (4.64 million units), while three-wheelers (1.08 million units) and commercial vehicles (0.84 million units) also recorded steady traction, reflecting broad-based demand across segments.
In FY26, a total of 136,995 units of construction equipment were sold, registering an increase of marginally 2%.
Increased vehicle use has contributed to record highway utilisation. FASTag collections during April–February FY26 reached a record Rs. 82,900 crore (US$ 9.38 billion) in FY26, registering a 14% year-on-year increase, driven by higher traffic volumes, expansion of the National Highway network and wider adoption of electronic toll collection.
Private investment in India's highway sector is expected to approach Rs. 1 lakh crore (US$ 10.60 billion) in FY27, driven by the revival of the Build-Operate-Transfer (BOT) model and increased participation from private developers. The Government is prioritising Public-Private Partnership (PPP) projects and asset monetisation to mobilise long-term capital and accelerate highway infrastructure development.
India's National Highway network expanded significantly from 91,287 km in 2014 to 1,46,572 km in December 2025, registering an increase of over 60%. The growth has been driven by substantial expansion in 2L/2L+PS roads, which increased from 45,399 km to 85,004 km during the period. Higher-capacity corridors also witnessed rapid development, with 4-lane and above highways expanding from 18,278 km in 2014 to 45,516 km in 2025. In addition, High-Speed Corridors (HSCs) grew from 93 km to 3,052 km, reflecting the government's focus on developing access-controlled expressways. The shift towards wider carriageways highlights India's continued investment in improving highway capacity, connectivity and logistics efficiency. To further boost efficiency, 27 greenfield corridors spanning 9,860 km are under development, aligned with the masterplan for 2047.
In FY2026–27, the Government estimated road and infrastructure cess collections under the Central Road and Infrastructure Fund (CRIF) at Rs. 46,930 crore (US$ 4.97 billion), a 3% increase over the revised estimate of Rs. 45,780 crore (US$ 4.85 billion) in FY2025–26, to support road and other infrastructure development
Policy support has encouraged large-scale investment. FDI inflows in construction development stood at Rs. 1,39,474 crore (US$ 27.55 billion) between April 2000-March 2026. The GST cut on construction equipment from 28% to 18% has also boosted the construction equipment market, valued at US$ 14.3 billion in 2024 and projected to reach US$ 29.5 billion by 2033 at a CAGR of 7.6%. The National Highways Authority of India (NHAI) has advanced its Asset Monetisation Strategy through models like Toll-Operate-Transfer (ToT), InvITs, and securitisation, raising more than Rs. 1.4 lakh crore (US$ 15.85 billion).
Urban and rural connectivity projects are also progressing rapidly. In August 2025, Prime Minister Narendra Modi inaugurated projects worth Rs. 11,000 crore (US$ 1.25 billion) in Delhi, including the Dwarka Expressway section. The Union Cabinet has approved Pradhan Mantri Gram Sadak Yojana-IV (2024–29) with an outlay of Rs. 70,125 crore (US$ 8.21 billion) for 62,500 km of rural roads connecting 25,000 habitations.
On October 29, 2025, the Union Minister of Road Transport and Highways, Mr. Nitin Gadkari, announced a plan to upgrade 25,000 km of highways focusing on smart, sustainable road infrastructure, emphasizing economic development, investment, and employment generation. The sector’s revenue is expected to grow from Rs. 55,000 crore (US$ 6.17 billion) to Rs. 1.4 lakh crore (US$ 15.70 billion) within two years. This includes upgrading two-lane highways into four lanes to improve logistics and reduce costs.
Government has constructed 57,125 km of NHs during last five years, with an average construction of 34,215 lane-km of NHs per year. This leads to an average annual employment generation of about 33 Crore person-days, including direct and indirect employment.
Government has targeted to operationalize 18,000 km of Access Controlled National HSCs/ Expressways by 2028-29. Also, total 26,000 km of Access Controlled National HSCs / Expressways are targeted for award by 2032-33. Government has taken up the development of ring road / bypasses of cities with population of more than Five Lakh on priority. In addition, connectivity of ports as per the prioritization of Ministry of Shipping, Ports and Waterways and connectivity to Industrial nodes as per the priority of National Industrial Corridor Development Corporation (NICDC) are also taken up for development. The above proposed development will increase the logistics efficiency which will act as driver to economic growth.
The North-Eastern Region has received special attention. Over the past decade, 16,125 km of National Highways have been developed in the region. As of December 2024, 190 projects covering 3,848 km and costing Rs. 82,452 crore (US$ 9.36 billion) were active. States like Assam, Arunachal Pradesh, Manipur, and Mizoram are leading construction activity under the Special Accelerated Road Development Programme for the North-East (SARDP-NE), which aims to connect all 88 district headquarters in the region.
The National Highways Authority of India (NHAI) surpassed its target for 2025-26 registering 15% higher construction in the just concluded financial year at 5,313 km compared to the target of 4,640 km. However, the construction is slightly lower than the 5,614 km achieved in 2024-25.
As per the statement issued by the Ministry of Road Transport and Highways, the capital expenditure by NHAI in 2025-26 for the development of national highway infrastructure stood at Rs. 2,44,362 crore (US$ 27.8 billion) in FY26, marking a 2.5% increase over the budgetary support of Rs. 2,38,384 crore (US$ 27.1 billion) for the year, reflecting continued government focus on expanding road infrastructure.
NHAI had spent Rs. 2,50,000 crore (US$ 28.4 billion) in 2025–26, around 21% higher compared to Rs. 2,07,000 crore (US$ 25 billion) in 2023–24 and 45% more compared to Rs. 1,73,000 crore (US$ 21.8 billion) in 2022–23. The higher-than-expected performance by NHAI, under the Ministry of Road Transport and Highways, will help push up the overall construction by the ministry in 2025–26.
Financing models continue to evolve. National Highways Infra Trust (NHIT) raised Rs. 16,000 crore (US$ 1.92 billion) in InvIT Round 3, marking NHAI’s largest such transaction. Wayside amenities are being expanded, with 501 awarded and 94 already operational by April 2025, targeting more than 700 by FY29. Private companies are also stepping in, with Highway Infrastructure taking over toll operations on the Delhi-Vadodara Greenfield Expressway spur under a Rs. 18.96 crore (US$ 2.15 million) contract.
On February 4, 2026, The Ministry of Road Transport & Highways has proposed the development of a six-lane corridor from Salem to Kumarapalayam in Tamil Nadu, covering a total length of 102.035 km along the high-volume Kochi–Coimbatore–Bengaluru freight and passenger corridor. The project includes the provision of continuous service roads in built-up and industrial stretches in line with access management requirements, along with the upgradation of junctions, interchanges, and grade separators to improve road safety and traffic flow. It also includes the construction and widening of major and minor bridges, flyovers, Road-over-Bridges (ROBs), and culverts to meet future traffic demands.
The scale of ambition goes beyond roads to multimodal connectivity. In January 2025, metro projects worth Rs. 12,200 crore (US$ 1.43 billion) were launched in Delhi. Union Minister Nitin Gadkari has said India’s road infrastructure will soon exceed that of the United States. He noted 360 proposals for ropeway and cable car projects valued at US$ 7.93 billion and highlighted the need for collaboration on more than 300 tunnel projects.
These efforts are aligned with the Gati Shakti-National Master Plan, which seeks integrated infrastructure development to generate employment and improve efficiency. CareEdge Ratings estimates India will require US$ 18-20 trillion in additional infrastructure investment over the next 25 years to achieve its vision of becoming a US$ 25-30 trillion economy by 2047. Already, Gati Shakti has prioritised 81 high-impact projects, with major expressways such as Delhi-Mumbai, Amritsar-Jamnagar, and Saharanpur-Dehradun taking the lead. With streamlined approvals, advanced technology, and a balance of public and private participation, India’s road infrastructure is on track to become the backbone of long-term economic growth.
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
