Transforming India’s Infrastructure

While various policy levers and conditions are driving the unprecedented economic boom in the lives of over 1.4 Bn people, in India, the significant growth in infrastructure and its quality in recent times, have been a key propeller in the development of the country. Karan Sethi, Vice President, Invest India, relooks at India’s growth scenario

At a time when India is celebrating its 79th year of independence, it is also uniquely positioned at the threshold of greater economic rise. This year, the country is expected to become the fourth largest economy in the world, underscoring a remarkable and rapid rise from the tenth position merely ten years ago. During this period, the Indian juggernaut trebled in size (nominal GDP) and was the fastest growing large economy in 2024-25 at 6.5%. The country is expected to continue this trajectory of economic ascent and become the world’s third largest by 2030, doubling its nominal GDP.

Infrastructure development in India is undergoing a metamorphosis with the government shifting its focus from a need-based system of development to one where it is creating infrastructure for Viksit Bharat. At the heart of this new approach is an ethos to create integrated, multimodal and holistic connectivity to power India’s next leg of economic ascent.”

— Karan Sethi

In the last ten years, India invested over USD 1.2 Trn in building infrastructure and continued this momentum by allocating USD 130 Bn (3.4% of GDP) in its latest budget, marking a five-fold increase from ten years ago. This has resulted in the creation of world-class infrastructure assets aimed at bringing down the cost of logistics, improving the ease of doing business and augmenting the quality of life of its people. This also bears nexus to the multiplier effect (2.5 to 3.5 times in GDP) that investment in the sector has on manufacturing, services, and employment, serving as a catalyst for growth.

Apart from increasing its capital expenditure, the government has developed robust project pipelines through sector specific programs, adopted technology/digital platforms, and created financing mechanisms to energise the industry’s execution capacity.

Creating Infrastructure for New India

Through the National Infrastructure Pipeline (NIP) set forth in motion India’s target to invest over USD 1.4 Trn (2020-2025) in infrastructure development spanning the length and breadth of the country. The NIP paved the way for sub-sector blueprints focused to take infrastructure growth to the bottom of the pyramid and positively impact every business and individual in the country.

During ‘Bharatmala Pariyojana’, India’s road network became the second largest in the world at more than 63 lakh kms. Further, while the length of national highways increased by 60% (2014-2025), the average pace of highway construction trebled from 12 Kms/day to 37 Kms/day in merely six years (2014-2020), with a target of 50 Kms/day in the near future.

Not only this, the Ministry of Roads Transport and Highways is taking significant steps to reduce the country’s energy import bill and promote sustainability by aiming to achieve 30% electric vehicles adoption by 2030. It also revolutionised ease of travel by introducing its electronic toll collection program, FASTag, which has achieved a staggering 4.2 Bn transactions mopping up USD 8.5 Bn in 2024-25 (double from 2021-22 numbers).

The sector has also witnessed some of India’s engineering marvels including the Atal Tunnel (world’s longest highway above 10,000 feet), Bogibeel Bridge (India’s longest rail cum road bridge), and the Maitri Setu – “India’s Gateway of North-East”, connecting difficult terrains in the country. A flagship the Delhi-Mumbai Expressway is aimed at reducing travel time between the two cities by 50%.

Fuelled by a growing working class and middle class, India has emerged as the third largest domestic aviation market in the world. The government’s Regional Connectivity Scheme ‘UDAN – Ude Desh Ka Aam Naagrik’ has been instrumental in giving wings to the zealot Indian population by connecting the aspirational Tier II and Tier III cities. The number of operational airports has doubled from 74 (2014) to 160 (2025) adding 625 new air routes, potentially reshaping travel in India. With passenger traffic expected to double to 500 Mn/annum by 2030, around 50 new airports are expected to be built, and the aircraft fleet size is forecasted to treble from 700 to 2,000. Digi Yatra, a biometric-focused initiative, has already been rolled out across 24 major airports. Moreover, the clear aviation skies are also providing an impetus to aerospace component and drone manufacturing, apart from fuelling demand for the MRO industry.

With a target of moving 34 Mn passengers/day and transporting 9 Mn tons freight/day by 2030, Indian Railways has quintupled the average pace of commissioning new lines (2024 versus the period 2009-14). It has also undertaken new marquee projects such as Dedicated Freight Corridors (96% completed) and High-Speed Rail, while implementing Kavach, an indigenously developed train anti-collision system of the highest order.

The national transporter is also on a fast track to enhance passenger experience through a host of measures – inducting more than 100 new Made in India, semi-high speed Vande Bharat trains, revamping 1,300 stations under the Amrit Bharat Station Scheme, installing Wi-Fi at 6,000 railway stations, and streamlining its ticket booking portal (IRCTC). Indian Railways has successfully developed two architectural wonders – the world’s tallest rail bridge (Chenab Bridge) and India’s first vertical lift rail sea bridge (New Pamban Bridge).

 The Sagarmala programme has doubled port capacity and halved vessel turnaround time. It has aggressive goals to further quadruple port capacity will vitalize India’s target of doubling merchandise exports (USD 1 Trn in 2030). Key elements of this plan include developing mega/deep draft ports such as Vadhavan (envisioned as one of world’s top 10) and achieving full-scale operations at Vizhinjam Deepwater Seaport (India’s first dedicated transshipment port capable of hosting the world’s largest ships).

In addition, strong waves in the sector are also driving the country’s vision to become a top five shipbuilding nation by 2047 (current rank 22), underpinned by dedicated fiscal and policy support. The maritime segment is also adopting sustainable modes such as inland waterways (29 operational in 2025 from 3 in 2011) and the country’s first water metro in Kochi.

The government is focusing equally in creating significant urban physical infrastructure. With 1,013 Kms, India is now ranked third in total length of metro lines, having added 760 Kms in the last 10 years, while daily ridership quadrupled to 112 Mn. Taking this to the next level is the Regional Rapid Transit System project expected to stitch the entire National Capital Territory region into one economic centre.

To directly stimulate economic development, the country also launched the expansive National Industrial Corridor Development Programme, which included the development of four new industrial cities as ‘Smart Cities’, by employing next generation technologies to provide plug & play infrastructure. With the initial four nodes completed, the government announced another new 12 industrial cities in this year’s budget.  

India is also employing technology-based institutional mechanisms to improve planning of infrastructure projects and remove bottlenecks in their execution. The PM GatiShakti – National Master Plan for Multi-Modal Connectivity comprises a dynamic GIS platform unifying over 1,600 data layers, 44 central ministries and 36 states/UTs, to aid designing of multimodal infrastructure.

Further, the Project Monitoring Group was established for milestone-based tracking of large projects and removing their regulatory hurdles by bringing together government agencies and developers/investors. So far, the initiative has monitored 2,900 large projects. In addition, digital initiatives such as National Logistics Data Bank and The Unified Logistics Interface Platform have been launched by the government to leverage technology and create nationwide single window and data repositories for supply chain optimisation.

To unlock private sector investments in infrastructure, the government had launched the USD 81 Bn National Monetisation Pipeline, offering operational assets with steady cash flows across various sectors. The progressive Public Private Partnership framework and a mature secondary market in the country has attracted various institutional investors, and Canadian pension funds are a case in study. Five major Canadian investors (Brookfield, CPPIB, Fairfax, CDPQ and PSPIB) have invested over USD 40 Bn in India.

Recognising the need to create channels for sustainable long term infrastructure funding, in 2015, the government created India’s first-ever sovereign wealth fund, the National Infrastructure and Investment Fund (NIIF), that today manages USD 5 Bn across infrastructure and private equity. In another step, the government established the National Bank for Financing Infrastructure and Development (NaBFID), a legislation backed development financial institution, which in its first four years of operations (2022-2026), aims to achieve total cumulative sanctions of USD 35 Bn.