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FEBRUARY 27, 2023


The infrastructure industry is one of the main contributors to ongoing growth in the several economic sectors that drive the Indian economy. By 2027, India's infrastructure sector is anticipated to expand at a CAGR of 8.2%. An additional source of infrastructure expansion potential has been the announcement by India, the US, Israel, and the UAE of the beginning of a quadrilateral economic forum in November 2021. The "Infrastructure for Resilient Island States" programme, on the other hand, has demonstrated a tremendous chance to enhance the lives of fragile countries throughout the world by allowing Indian infrastructure expansion to blossom in triple-folds. This opportunity was revealed in November 2021.

Infrastructure development is essential if India is to achieve its goal of having a $5 trillion economy by 2025. In order to boost the growth of the infrastructure industry, the government has introduced the National Infrastructure Pipeline (NIP), along with other programmes like "Make in India" and the production-linked incentives (PLI) programme. Historically, funding for transportation, energy, and water and irrigation has accounted for more than 80% of the nation's infrastructure spending.

About 42% of the NIP projects in India are currently in the implementation phase, indicating that construction has begun. A considerable 31% are still in the conceptual stage, while another 19% are in the development stage. Around 70% of India's estimated capital investment on infrastructure is expected to come from industries like energy (24%), roads (19%), urban (16%), and railways (13%) between the fiscal years 2020 and 2025.

Infrastructure is the backbone of economic growth. It improves access to basic services such as clean water and electricity, creates jobs and boosts business.

FDI in Infrastructure in India

According to the Department for Promotion of Industry and Internal Trade, foreign direct investment (FDI) in the construction development (townships, housing, built-up infrastructure, and construction development projects) and construction (infrastructure) activity sectors was US$26.17 billion and US$26.30 billion, respectively, from April 2000 to Dec 2021. (DPIIT). About 13% of the US$ 81.72 billion in overall FDI inflows during the fiscal year (FY) 2021 were attributable to infrastructure-related operations. During the predicted period, it is expected that India's infrastructure would rise at a CAGR of about 7%. (2019-2028).

With 2,500 km of access control highways, 9,000 km of economic corridors, 2,000 km of coastline and land port roads, and 2,000 km of strategic highways, highway building would be completed. The FASTag system encourages increased highway commercialization, which increases revenue for the National Highways Authority of India (NHAI). Before 2024, it was anticipated that more than 6,000 km of roads would be monetized across at least 12 lots of bundles. For road infrastructure, the government has budgeted US$ 236 billion (Rs. 1,963,943 crores).

The international Asian Development Bank (ADB) committed to investing $100 million in the government-sponsored National Investment and Infrastructure Fund (NIIF) in 2020. The inflows in the townships, construction development projects, and housing verticals were anticipated at US$ 25.5 billion during the financial years (FY) 2000 and (FY) 2019.

These measures have helped the "Smart Cities Mission" and "Housing for All" programmes. Saudi Arabia plans to invest up to $100 billion in India in the areas of mining, petrochemicals, infrastructure, agriculture, and energy.