In the Union Budget 2026–27, capital investment outlay for infrastructure has been increased to Rs. 12.22 lakh crore (US$ 138.3 billion), reflecting an 11.5% increase over the revised estimate for 2025–26. The government also established the Infrastructure Finance Secretariat to enhance private sector participation, facilitating investment opportunities across key sectors. Various initiatives have been introduced to attract private investments, particularly in roads and highways, airports, industrial parks, and higher education and skill development. The Second Asset Monetization Plan aims to recycle Rs. 10 lakh crore (US$ 115.34 billion) in capital into new projects between 2025-30, further boosting private sector involvement.
Cement demand in India is projected to remain robust, with a CAGR of 7-8% over FY25-27, according to JM Financial. In the same budget, plans were announced to connect 120 new airports over the next decade, targeting an additional four crore passengers. Road construction is expected to continue its current momentum, with India adding up to 13,000 kilometres in the year ending March 2025, reflecting an annual increase of 5-8%, as per ICRA. India's National Highways network expanded to 1,46,560 km in FY26 (till December 2025), with 9,380 km constructed during the year. This growth has been supported by flagship programs such as Bharatmala Pariyojana, which subsumes the National Highway Development Project (NHDP), and the Special Accelerated Road Development Programme for the North-East Region (SARDP-NE), among others.
India’s logistics market, valued at US$ 240.5 billion in 2025, is projected to reach US$ 527.5 billion by 2033 at a CAGR of 10.9% from 2025 to 2033, supported by over 22 million workers and millions of new jobs expected through initiatives such as infrastructure status for logistics, the Unified Logistics Interface Platform (ULIP), the National Logistics Policy, PM GatiShakti, and logistics parks.
FDI in construction development (townships, housing, built-up infrastructure, and construction development projects) and construction (infrastructure) activity sectors stood at Rs. 1,39,474.23 crore (US$ 27.55 billion) and Rs. 2,81,161.95 crore (US$ 38.74 billion), respectively, between April 2000-March 2026.
The production of Cement, Steel, Fertilizers, Coal and Electricity recorded positive growth in March 2026.
The combined Index of Eight Core Industries (ICI) in FY26 at 169.4, as compared to 164.9 in FY25.
Summary of the Index of Eight Core Industries as of February 2026:
- Coal: Output remained stable with decline of 0.47% YoY growth during FY26.
- Crude Oil: Production declined by 2.79% during FY26.
- Natural Gas: Output levels declined by 2.77% during FY26.
- Petroleum Refinery Products: Production remained largely stable, with negligible variation during FY26.
- Fertilizer's: Output remained stable during FY26.
- Steel: Production registered strong growth of 9.53% YoY during FY26.
- Cement: Output increased 8.71% YoY during FY26.
- Electricity: Electricity generation recorded growth of 1.01% YoY during FY26.
On February 26, 2026, it was highlighted that India is accelerating infrastructure development through industrial corridors to boost manufacturing and connectivity. The Union Budget 2026–27 announced a new integrated East Coast Industrial Corridor, with multiple projects across 11 corridors underway and several nearing completion, supported by an allocation of Rs. 3,000 crore. These initiatives aim to develop world-class multimodal infrastructure, smart industrial cities, and sustainable systems, attracting investment, improving logistics efficiency, generating employment, and strengthening India’s global manufacturing competitiveness.
On February 13, 2026, the KPMG blog highlights that the Union Budget 2026–27 strengthens India’s infrastructure-led growth strategy, with continued focus on infrastructure, manufacturing, urban development, and tourism to build a strong economic foundation. These recent developments are expected to positively influence the real estate sector by supporting growth across residential, commercial, industrial, and hospitality segments, reinforcing the overall infrastructure-driven expansion.
As of July 2025, India’s steel demand continues to be led by the infrastructure and construction sectors, with government projects contributing 25-30% of usage, supported by a 12% safeguard duty on imports.
As of May 2026, India’s total installed electricity capacity reached 542.36 GW, with 250.83 GW from thermal sources and 291.53 GW from non-fossil fuels including 225.61 GW renewable (157.05 GW solar and 56.81 GW wind) and 8.78 GW nuclear.
India's National Highways network expanded to 1,46,560 km in FY26 (till December 2025), with 9,380 km constructed during the year, forming the primary arterial network of the country, strengthened through flagship initiatives such as Bharatmala Pariyojana and the Special Accelerated Road Development Programme for the North-East Region (SARDP-NE).
Indian Railways set new records in FY26, earning Rs. 2.79 crore (US$ 31.57 billion) in revenue and achieving a Freight loading on Indian Railways increased by 5.27% to 1,700 million tonnes (MT) in FY26 from 1,614.90 MT in FY25, driven by strong growth in key industrial commodities. Among major segments, fertilisers recorded the highest growth at 13.45%, followed by pig iron & steel (17.98%), other goods (5.98%), iron ore (6.11%), and containers (11.32%), reflecting sustained momentum in industrial activity and infrastructure development. Passenger traffic reached a new high of 7.38 billion in FY26, up 1.23% from 7.29 billion in FY25 and expected to reach 7.71 billion in Fy27 as per budget 2026-27, reflecting sustained growth in rail-based mobility and the continued expansion of India’s mass transit network. Under the Union Budget 2025-26, a record CAPEX of Rs. 2,92,030 crore (US$ 33.16 billion) has been allocated for Railways, including the manufacturing of 100 Amrit Bharat, 50 Namo Bharat, and 200 Vande Bharat trains, while revenue receipts are projected to exceed Rs. 3,00,000 crore (US$ 34.33 billion) for the first time. As of March 2026, Indian Railways had electrified 99.6% of its broad-gauge network. The ‘Green Energy Project’ further emphasizes renewable energy integration for a more environment-friendly railway network.
In November 2025, the Union Cabinet approved Phase II of the Pune Metro Rail Project with an estimated cost of Rs. 9,857 crore (US$ 1.13 billion) to build 31.64 km of new corridors (Lines 4 and 4A) with 28 elevated stations, expanding connectivity across East, South and West Pune as part of the city’s Comprehensive Mobility Plan.
As of October 14, 2025, London-based infrastructure investor Actis said India is one of the most attractive infrastructure markets globally and plans to explore ways to double its existing Rs. 17,500 crore (US$ 2 billion) investment in energy, roads, transportation and digital infrastructure over the next three to four years.
As of August 19, 2025, the Cabinet Committee on Economic Affairs, chaired by Prime Minister Mr. Narendra Modi, approved the construction of a 110.875 km six-lane access-controlled Capital Region Ring Road (Bhubaneswar Bypass) in Odisha on Hybrid Annuity Mode at a total cost of Rs. 8,307 crore (US$ 949 million) to ease congestion, enhance freight efficiency and generate significant employment.
In May 2025, Prime Minister Narendra Modi inaugurated the Vizhinjam International Seaport in Kerala, India’s first transshipment hub, developed at a cost of Rs. 8,867 crore (US$ 1.03 billion). L&T Energy GreenTech announced India’s largest green hydrogen plant at IOCL Panipat Refinery, producing 10,000 tonnes annually for 25 years using renewable energy. In parallel, Larsen & Toubro (L&T) formed the L&T Green Energy Council to advance global green energy solutions, while BHEL launched Harit BHEL to support renewable energy, energy efficiency, and sustainability goals. GMR Innovex, part of the GMR Group, is developing digital solutions to enhance airport passenger experience, while the GMR Aero Academy and School of Aviation are preparing a skilled workforce for the growing aviation sector. GMR Airports also joined the UN Global Compact, committing to sustainable aviation and net-zero emissions. Adani Ports and SEZ is expanding into high-growth markets like the Philippines, Vietnam, and Indonesia, targeting 140-150 MMT international throughput by 2030, alongside refinancing and new investments of Rs. 12,000 crore (US$ 1.40 billion) in 2025.
Infrastructure development continues under PM GatiShakti, which has integrated 44 Central Ministries and 36 States/UTs, assessed 208 major projects worth Rs. 15,39,000 crore (US$ 178.89 billion) and identified 52 critical projects to connect maritime ports and inland waterway terminals. India’s express logistics and courier sector is projected to grow from Rs. 78,525 crore (US$ 9 billion) in FY25 to Rs. 1,57,050-1,91,950 crore (US$ 18-22 billion) by FY30, supporting 6.5-7.5 million jobs, driven by e-commerce, MSMEs, and infrastructure expansion. During FY26, total Cargo handled by major ports was 701.28 MMT with overseas cargo and 213.45 MMT with coastal cargo accounting for 76.67% and 23.33%, respectively. The Infrastructure Investment Trust (InvIT) market is projected to grow to Rs. 22,10,802 crore (US$ 258 billion) by 2030, up from Rs. 6,28,108 crore (US$ 73.3 billion) in FY25.
Housing and urban development remain key priorities, with the Union Housing and Urban Affairs Ministry’s budget for FY27 increased by 50% to Rs. 85,522 crore (US$ 9.68 billion) and the PM Awas Yojana (Grameen) targeting two crore additional houses in the next five years. GST 2.0 is expected to reduce construction costs by 3.5-4.5%, lowering housing prices by 5-8% and boosting demand, particularly in the affordable and mid-segment markets. Real estate PE investments rose 28% in Q1 FY23, reflecting market recovery. Cement volumes increased by 9% in May 2025, with FY26 volumes expected to grow 6-7%, supported by government infrastructure push and real estate activity. Six new urea units added as of March 2025 increased capacity from 207.54 LMTPA in 2014-15 to 283.74 LMTPA.
India’s energy and utility sectors have seen significant FDI inflows, with 1,24,372.37 crore (US$ 20.10 billion) invested in the power sector between April 2000-June 2025, and a FY27 budget allocation of Rs. 29,997 crore (US$ 3.39 billion). Transmission lines of 220 kV and above measured 4,94,994 ckt km with 13,54,103 MVA AC transformation capacity as of May 2025. As of December 2025, India’s authorised operational natural gas pipeline network totals 25,925 km. As on October 2025, 6,94,711 km of Optical Fibre Cable (OFC) has been laid, and 2,09,809 GPs are Service Ready on OFC. In addition, 5,034 GPs have been connected over satellite media. Thus, a total 2,14,843 GPs are now endowed with broadband connectivity. Telangana released Rs. 1,000 crore for rural road construction.
In the Union Budget 2026–27, the allocation for the Ministry of Road Transport and Highways has been increased to Rs. 3,09,875 crore (US$ 35.1 billion), marking a 8% rise over the revised estimate of 2025–26. National Highways and transport corridors have been expanded under multiple initiatives over the past eight years, reflecting their critical role in economic and social development. India’s infrastructure ambitions include spending US$ 1.723 trillion (Rs. 143 trillion) between FY24-30, focusing on power, roads, renewable energy, and electric vehicles, while committing to net-zero carbon emissions by 2070 and achieving 500 GW of renewable capacity by 2030. In the Union Budget 2026-27 the Department of Telecommunications and IT was allocated Rs. 73,991 crore (US$ 8.37 billion).
As on March 2026, 162 Vande Bharat train services (Chair Car) and 02 Vande Bharat Sleeper Express are operational on the Indian Railways network, while NTPC and NALCO signed an MoU in February 2024 to explore providing 1,200 MW of continuous power for NALCO’s Odisha smelter expansion. Earlier, in April 2023, the PM GatiShakti network planning group approved four railway projects, contributing to India’s robust infrastructure growth, complemented by Smart Cities Mission progress, with 94% of 8,067 projects completed by June 2025, involving investments of Rs. 1,64,000 crore (US$ 19.14 billion) and 99.44% of the Rs. 47,652 crore (US$ 5.56 billion) budget released to 100 cities.
India’s infrastructure landscape stands at the forefront of the nation’s growth story, underpinned by record government capital expenditure, strong private participation, and a clear vision for sustainable, inclusive development. Expanding connectivity across roads, railways, ports, and aviation, coupled with advancements in green energy and digital infrastructure, is transforming India into a global hub for logistics, manufacturing, and innovation. With continued reforms, technology integration, and forward-looking investments, India is well-positioned to achieve its goal of building world-class infrastructure, driving economic resilience, and paving the way towards becoming a US$ 5 trillion economy in the coming years.
