Infrastructure sector is a key driver for any economy. Infrastructure sector includes Construction-Development, Power, Bridges, Dams, Roads, Highways, Water supply, Sanitation & Urban Infrastructure development. Construction-development covers Residential, Office, Retail, Hotels & Leisure parks. The sector is highly responsible for propelling India’s overall development & enjoys intense focus from Government of India for initiating policies that would ensure time-bound creation of world class infrastructure in the country. Infrastructure activities accounted for 13% share of the total FDI inflows in 2021. Schemes such as the revolutionary Smart City Mission (target 100 cities) are expected to improve quality of life through modernized/ technology driven urban planning.
100% FDI under automatic route allowed in construction-development, built-in infrastructure, townships, housing & industrial parks
Current Scenario
- The sector has been the 2ndlargest FDI recipient for India in 2020-21 & 2ndlargest employer in India
- FDI inflows during April 2000 to December 2021
- Infrastructure: $26.30 billion, accounting for 4.59% of the total FDI inflows
- Construction-development: $26.17 billion accounting for 4.57% of the total FDI inflows
- $ 650 billion will be required for urban infrastructure over the next 20 years
Investment Opportunities
- Technologies & solutions for smart sustainable cities & integrated townships
- Technologies for the promotion of low cost & affordable housing
- Green building solutions
- Sustainable & environmental friendly building materials
- Training & skill development of construction sector workers
- Smart cities
- Urban water supply, urban sewerage & sewage treatment
Why Invest?
- Despite temporary slowdown, construction sector in India will remain attractive over the long run due to demand from real estate & infrastructure projects
- Government aims to provide clean & sustainable environment. Focus would be on investment in green materials, smart cities, industrial corridors, railway lines & ports
- Government passed a bill on 25 Mar 2021 to set up National Bank for Financing Infrastructure & Development (NaBFID) to fund infrastructure projects in India
- Construction activities contribute 9% of India’s GDP. The sector employs 51 million people
Read Ahead
- By 2025, construction market in India is expected to reach $ 1.4 trillion. Construction output is expected to grow average @ 7.1% each year
- Expected cement capacity addition of 80-100 MT per annum over next 5 years
- Modernization of building bye-laws, implementing town planning schemes & transit oriented development. Standardization of design of metro systems
- National Highway network to be expanded by 25,000 kilometers in 2022-23 under Prime Minister Gatishaktiplan of Union Budget 2022-23
