Infrastructure sector in India
Infrastructure improvements are essential for India's economic growth
Contact our experts here with no obligationImproving the country’s infrastructure is essential for India to continue to drive economic growth and facilitate business in the country.
Infrastructure solutions for the country’s manufacturers therefore remain one of the main items on the political agenda as it will make shipping of goods and exports effective and beneficial.
The government has launched the National Infrastructure Pipeline (NIP) along with other initiatives like ‘Make in India’ and the Production-Linked Incentives (PLI) scheme to enable this growth.
Historically, more than 80 per cent of the country’s infrastructure spending has gone to finance transport, electricity, water and irrigation.
While these sectors are still major focus areas, the government has begun to focus on other sectors as well. There is a compelling need for better facilities across the infrastructure spectrum – from housing to water and sewerage services, and digital and transport needs – that drive economic growth and enhance the quality of life.
Snapshot of the Indian infrastructure sector
- The Indian government has budgeted $13 billion for the improvement of the national infrastructure for the period 2019-2025.
- The Sagarmala project has identified 12 key ports that will be invested in up to 2035. The aim of this project is to boost growth and improve infrastructure around the ports for more efficient transportation of goods.
- India now has a total road network of 67 million kilometres, making it the world’s second largest road network.
- India currently has the fifth largest metro network in the world and will soon overtake advanced economies like Japan and South Korea. The metro network has a length of 810 km and is operational in 21 cities.
- In FY2023, Indian Railways’ revenues were $28.9 billion. Last year, total revenues were $26.8 billion.
- The Indian logistics market was worth $317.3 billion in 2024 and is expected to be worth $484.4 billion by 2029, with a CAGR of 8.8 per cent.


Growth indicators of India's infrastructure sector
- With rapid digitalisation and economic growth, the dividing line between metropolitan regions and smaller cities is blurring. As a result, the demand for commercial real estate is growing exponentially in Tier II & III cities.
- By 2050, India is expected to account for 40 per cent of global rail business. due to increasing urbanisation.
- In the interim budget for 2024-25, infrastructure investment has been increased by 11.1 per cent to $133.9 billion, equivalent to 3.4 per cent of GDP.
- India aims to raise its ranking on the Logistics Performance Index to 25 and reduce logistics costs from 14 to 8 per cent of GDP over the next five years, representing a cut of about 40 per cent.
- 100 per cent FDI in the roads and highways sector is now allowed. The FDI ceiling in the aviation sector will be raised from 79 per cent to 100 per cent, with up to 49 per cent available through the automatic route.

Interesting investment opportunities
- Ports:
– Development of inland waterways and inland waterway transport.
– Projects to build ports and harbour basins.
– Projects to maintain ports. - Railway:
– Projects involving high-speed trains and freight rail lines.
– Manned and unmanned railway crossings.
– Technological innovations to enhance safety and reduce accidents. - Roads:
– Toll systems
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