INFRASTRUCTURE

August 2023
For updated information, please visit www.ibef.org
Table of Contents

Executive Summary 3

Advantage India 4

Market Overview and Trends 6

Strategies Adopted 13

Growth Drivers and Opportunities 15

Key Industry Contacts 28

Appendix 30

2
Executive summary

2. INCREASING PRIVATE 3. IMPROVEMENT IN LOGISTICS

SECTOR INVOLVEMENT • India’s logistics market is estimated to be
• The Indian government has introduced various formats in US$ 435.43 billion in 2023 and is expected
order to attract private investments, especially in roads and to reach US$ 650.52 billion by 2028,
highways, airports, industrial parks and higher education and growing at a CAGR of 8.3%.
skill development sectors. • The Ministry of Commerce and Industry,
• Private Equity-Venture Capital firms invested US$ 3.5 billion states that the logistics sector accounts for
(across 71 deals) in Indian companies in May 2023. 5% of India's GDP and provides jobs for
nearly 2.2 crore Indians.

4. RISING FOREIGN
1. HIGH BUDGETARY
DIRECT INVESTMENT
ALLOCATION FOR
(FDI) IN THE SECTOR
INFRASTRUCTURE
• In Budget 2023-24, capital • FDI in construction development
investment outlay for infrastructure (townships, housing, built-up
is being increased by 33% to infrastructure and construction
Rs.10 lakh crore (US$ 122 billion), development projects) and
which would be 3.3 per cent of construction (infrastructure) activity

•
GDP.
Infrastructure Finance Secretariat
2 3 sectors stood at US$ 26.35 billion and
US$ 29.68 billion, respectively,
is established to enhance between April 2000-March 2023.
opportunities for private
investment in infrastructure that
will assist all stakeholders for
more private investment in
1 4
infrastructure.

Source: Media sources, DPIIT, Equirius Capital, EY, National Infrastructure Pipeline

3
Advantage India

4
Advantage India

2. ATTRACTIVE OPPORTUNITIES 3. POLICY SUPPORT

• Development of infrastructure has a multiplier effect on demand and ▪ Budget 2023-24 is complemented with a continuation of the 50-year
efficiency of transport and increases commercial and interest-free loan to state governments for one more year to spur
entrepreneurship opportunities. investment in infrastructure and to incentivize them for complementary
• In June 2022, the Minister of Road Transport and Highways, opened policy actions, with a significantly enhanced outlay of ₹ 1.3 lakh crore
15 national highway projects worth Rs. 13,585 crore (US$1.7 billion) (US$ 16 billion).
in Patna and Hajipur, Bihar. ▪ Under the National Infrastructure Pipeline (NIP), projects worth Rs. 108
• In October 2021, the Dubai government and India signed a contract trillion (US$ 1.3 trillion) are currently at different stages of
in October 2021 to build infrastructure in Jammu and Kashmir, implementation
including industrial parks, IT towers, multipurpose towers, logistics ▪ In November 2022, National Investment and Infrastructure Fund (NIIF)
centres, medical colleges, and specialized hospitals. is set up as a collaborative investment platform between the
Government of India, global investors, multilateral development banks
(MDB) and domestic financial institutions to facilitate investment across
1. ROBUST DEMAND multiple sectors in India through an India Japan Fund.
• India intends to enhance its
infrastructure to reach its 2025
economic growth target of US$ 5 4. INCREASING INVESTMENT
trillion. ▪ Under Budget 2023-24, capital investment
• India's population growth and outlay for infrastructure is being increased by
economic development require 33% to Rs.10 lakh crore (US$122 billion), which
improved transport infrastructure, would be 3.3% of GDP and almost three times
including investments in roads,
railways, aviation, shipping and
inland waterways.
2 3 ▪
the outlay in 2019-20.
Under Budget 2023-24, Infrastructure Finance
Secretariat is being established to enhance
opportunities for private investment in
infrastructure that will assist all stakeholders for
more private investment in infrastructure,
including railways, roads, urban infrastructure,

1 4
and power.

Source: Media Sources, DPIIT, Economic Survey 2023, News Articles

5
MARKET OVERVIEW AND TRENDS

6
Performance of eight core infrastructure industries

▪ The production of Coal, Electricity, Steel, Cement, Fertilizers, Index of eight core industries
Refinery Products and Natural Gas increased in May 2023.

▪ The combined Index of Eight Core Industries (ICI) increased by 4.3%

(provisional) in May 2023.

▪ In March 2023, the overall index of eight core industries stood at

163.6* driven by the production of coal, refinery products, fertilizers,

195.8
191.2
steel, electricity and cement industries.

188.5

185.2
177.6

170.5
▪ The cumulative growth rate of ICI during FY23 stood at 7.6%

164.4
163.6

153.5
(provisional) compared to last year's corresponding period.

146.6
136.9
131.2
▪ In November 2022, NETRA NTPC and the National Centre of

128.5
125.1
Excellence in Carbon Capture & Utilisation (NCoE-CCU), IIT
Bombay launched the assessment of ‘CO2 Geological Storage
Potential’ in India at NITI Aayog.

76.9
76.6

72.4
71.1
▪ In August 2022, the Prime Minister of India inaugurated the nation's
first second-generation (2G) ethanol project in Panipat, built at an
estimated cost of over Rs. 900 crore (US$ 108.7 million) by Indian
Oil Corporation Ltd. (IOCL).

Coal

Natural Gas

Fertilisers

Cement

Overall
Crude Oil

Steel

Electricity
Products
Refinery
FY24* FY23

Note: * - Provisional (April-May 2023-24)

Source: Ministry of Commerce and Industry, NTPC Website, PIB, News Articles

7
Growth in infrastructure related activities

▪ The ‘Green Energy Project’ is an initiative to make Indian Railways Growth in infrastructure-related activities in FY22 (in %)
environment-friendly by focusing on renewable sources of energy.
▪ In April 2023, the network planning group (NPG) under the PM
20
GatiShakti initiative approved four railway projects related to the 15.7
doubling of lines between Aurangabad and Ankai in Maharashtra. 15
▪ In FY23, cement production increased by 11% driven by the 10
6.90
government’s push for infrastructure development and increased real 4.50
estate activity. 5

▪ As of March 2022, the Ministry-wise progress of projects is as 0

follows:
-5
➢Ministry of Road Transport and Highways has completed 1,41,190
km of National Highways out of the set target of 2,00,000 km for -10
2024-25. -15
➢Department of Telecommunication has created the OFC (Optical
-20
Fibre Cable) network of 33,00,997 km against the set target of -21.30
50,00,000 km for 2024-25. -25

Rail freight

major ports
Electricity Generation

National Highway Construction

➢Ministry of Petroleum has completed the laying of a gas pipeline of

Cargo at
earning
20,000 km out of 34,500 km targeted for the same period.
➢Ministry of Power has surpassed its target for laying the
transmission network of 4,54,200 km.
▪ As on 31 October 2021, 121.47 Mega Watt (MW) solar rooftop
capacity has been installed at 1094 railway stations across the
country including major railway stations such as Varanasi, New
Delhi, Old Delhi, Jaipur, Kolkata, Guwahati, Katra, Secunderabad,
Howrah stations, etc.

Source: Economic Survey, Ministry of Railways, Indian Ports Association, Central Electricity Authority

8
Strong momentum in expansion of roadways

▪ India has about 63.73 lakh km of road network, which is the second largest in the
world.
▪ National Highways play a very important role in the economic and social Road construction per day (kms)
development of the country by enabling efficient movement of freight and passengers
and improving access to the market. MoRTH and its implementing agencies have
implemented multiple initiatives in the last 8 years to augment the capacity of the 45
National Highway infrastructure in India.
▪ In the Union Budget 2023-24, the government has decided to raise the allocation

42
40
towards the Ministry of Roads by some 36% to Rs. 2.7 lakh crore (US$ 32.6 billion)
for 2023-24.

37
35
▪ In FY23, the total length of National Highways in the country was 1,45,240 km.

34
▪ National Highways had increased from 91,000 km in 2008 to 1,41,000 km in 2022, 30
and the pace of construction had improved from 12 km a day to 42.03 km in FY23.

30

28
▪ In December 2022, Mr. Nitin Gadkari, Minister of Road Transport and Highways

27
25
inaugurated and laid the foundation stone of 8 National Highway projects of 226 km
length worth Rs. 1800 crore (US$ 217.4 million) at Igatpuri, Nashik, Maharashtra.

23
20
▪ In October 2022, the Prime Minister of India laid the foundation of road and ropeway
projects worth more than Rs. 3,400 crores (US$ 410 million) in Mana, Uttarakhand.

17
15
▪ A network of 35 Multimodal Logistics Parks is planned to be developed as part of
Bharatmala Pariyojana, with a total investment of about Rs. 46,000 crore (US$ 5.5

12
billion), which once operational, shall be able to handle around 700 million metric 10
tonnes of cargo. Of this, MMLPs at 15 prioritized locations will be developed with a
total investment of about Rs. 22,000 Crore (US$ 2.6 billion). 5
▪ Government is working towards the development of a national highway network of 2
lakh kms by 2025. 0
FY15 FY17 FY19 FY21 FY23*

Source: Ministry of External Affairs, Economic Survey 2022, News Article *- February 2023

9
Strong revenue growth for Indian railways
▪ The Indian Railways expects to complete total revenue of Rs. 2,64,500 crore (US$
31.81 billion) by the end of 2023-24.
▪ As per the Union Budget 2023-24, a capital outlay of Rs 2.40 lakh crore (US$ 29
billion) has been provided for the Railways, which is the highest ever outlay and Gross revenue trends over the years (US$ billion)
about 9 times the outlay made in 2013-14.
▪ For 2023-24:
➢ Total revenue from traffic is estimated to be Rs. 2,64,600 crore (US$ 32.17 35.00
billion), an increase of 9% over the previous year.
➢ Freight revenue is estimated to be Rs. 1,79,500 crore (US$ 21.82 billion), an
increase of 9% over the previous year. The passenger revenue is estimated to 30.00
be Rs. 70,000 crore (US$ 8.51 billion), an increase of 9% over the previous

29.18
year.

27.71
25.00

25.02

24.99
▪ Vision 2024 has been envisaged to achieve targets of 2024 MT freight loading by

24.64

23.10
2024.
▪ Indian Railways has planned to install 1000 MW of solar power plants and about 20.00
200 MW of wind plants by 2022-23. Out of this, about 204.82 MW (101.42 MW
solar and 103.4MW wind power) of renewable power has already been set up.
▪ As of November 2022, 83% of the total Broad-Gauge network has been electrified. 15.00
During 2022-23, electrification of 1,973 Route km (2,647 TKM) has been achieved,
which is 41% higher as compared to the corresponding period of 2021-22.
▪ In addition, 1,161 & 296 km of electrification of double lines & sidings respectively 10.00
have also been completed to date. Thus, a total of 4100 TKM have been electrified
during 2022-23
▪ Indian Railways' Coach production units have ramped up LHB coach production by 5.00
manufacturing 4,175 LHB coaches in FY 2022–2023, till 31st January, to ensure
convenient and faster mobility.
0.00

FY22
FY17

FY18

FY19

FY20

FY23
Source: Ministry of Railways, News Article, PIB, Make in India Portal

10
Power generation capacity has increased at a healthy pace

▪ As on May 2023, India’s total installed electricity generation capacity stood at

Installed electricity generation capacity (GW)
417.66 GW.
▪ As on February 2023, India’s installed renewable energy capacity has
CAGR 6.08%
increased 396% in the last 8.5 years and stands at more than 174.53 Giga
Watts (including large Hydro), which is about 42.5% of the country’s total 450
capacity.
▪ As of May 2023, the installed solar, wind and other renewable energy

417.66
400
capacity has increased by 30.2% and stands at 125.69 GW.

399.49
382.15
▪ The cumulative FDI equity inflow in the Power sector is US$ 16.58 billion

370.11
350
during the period April 2000 to March 2023. This constitutes 2.61% of the

356.10
344.00
total FDI inflow received across sectors.

326.84
▪ For 2023-24, the total budgetary allocation towards the Ministry of Power 300
stood at Rs. 1,96,035 crore (US$ 23.83 billion).

280.33
▪ In fiscal year 2022-23, India expected to commission 10 thermal power units 250
of an aggregate 7,010 MW capacity.
▪ Cumulatively 39 thermal power plants with a capacity of 27,550 MW are 200
under construction and will likely take another four years to complete.
▪ India’s power consumption grew by 13.31% on an annual basis to 127.39 150
billion units (BU) in September 2022 and 11.65% in H1 FY23.
▪ Thermal power plant load factor or capacity utilization will improve to 63% in
FY24, fueled by strong demand growth along with subdued capacity addition 100
in the sector.
▪ In October 2022, the Ministry of Power launched a Scheme for Procurement 50
of Aggregate Power of 4500 MW on a competitive basis or five years on
Finance, Own and Operate (FOO) basis under B (v) of SHAKTI Policy to help 0
the states that are facing power shortage and also help generation plants to

FY16

FY17

FY18

FY19

FY20

FY21

FY22

FY23*
increase their capacities.

Note: * - Till May 2023, GW - Gigawatt

Source: CEA (Central Electricity Authority), News Articles

11
Key private players

Major projects: Meerut Budaun Six Lanes Expressway, Kaithal Rajasthan Four Laning project on NH

1 152/65, Mumbai-Pune BOT Project, Pune-Nashik BOT Project, Bharuch-Surat BOT Project, Thane-
Bhiwandi by-pass 4 Lane Project, Thane Ghodbunder BOT Project, Ahmedabad-Baroda NH-8, 6
laning of Agra - Etawah bypass, Gandeva-Ena section of Vadodara-Mumbai 8 lane expressway

Major projects: Aroor to Thuravoor Thekku section of NH 66, Bundelkhand Expressway

2 Project Belgaum to Sankeshwar bypass, Link Road NH-166 S to Mopa Airport, Memmadpur
(Ambala) – Banur (IT City Chowk) –Kharar (Chandigarh) Corridor, Four laning of Arrah to
Pararia section of NH-319, Four laning of Pararia to Mohania section of NH-319

Major projects: Ramban Banihal Road Project, J&K, Coastal Road Project, Mumbai, NH-34 -
Bahrampore – Farakka Highway, West Bengal, NH-34 - Farakka - Raiganj Highway, West
3 Bengal, Bandra-Worli Sea Link, Badarpur Elevated Highway Project, Delhi Faridabad
Elevated Expressway, Breakwater construction for new port at Ennore, Chennai

Agra Lucknow Expressways—Uttar Pradesh, Outer Ring Road, Hyderabad Growth

4 Corridor—Telangana, Nagpur Mumbai Express Way, Pune Metro Package 1 & 2, Nagpur
Metro, Chennai Metro, Delhi Metro, 4 Lane Elevated Highway Project on NH-7 in
Bangalore City

Major Projects: Medical College & Hospital at Golaghat, Assam, Commercial office space in Bengaluru,

5 Data centres in Mumbai, Police reserve campus in Guwahati, Transmission lines in Gujarat, Delhi
Metro Rail construction and design, Manufacturing facility in Haryana, Irrigation projects in Odisha

Source: Company websites and News Articles

12
STRATEGIES ADOPTED

13
Strategies adopted

▪ Larsen & Toubro (L&T) to form L&T Green Energy Council, a think-tank comprising of eminent thought leaders, in
a significant step towards building a global green energy business.
▪ In January 2023, Larsen & Toubro announced the signing of an MoU with the Norway-based H2Carrier (H2C) to
cooperate towards developing floating green ammonia projects for industrial-scale applications with an aim to
decarbonize the global economy.
▪ In January 2023, the Construction arm of Larsen & Toubro secured orders for its power transmission &
distribution and buildings & factories businesses to establish a 112.5MW Solar Power Plant in West Bengal and to
construct a 600-bed super speciality hospital at Mumbai, respectively.

▪ In August 2023, Bharat Heavy Electricals Ltd. (BHEL) and Greenstat Hydrogen India Pvt. Ltd. (GHIPL) signed an
MoU for ‘Potential Collaboration Opportunities in Green Hydrogen and Derivatives in the Hydrogen Value Chain’.
This MoU will help in contributing towards the country's 'National Hydrogen Mission' aimed at making India
'AatmaNirbhar' in this area.
▪ In December 2022, BHEL formed a consortium with Titagarh Wagons and is among five entities which have bid
for the mega Rs. 58,000 crore (US$ 7 billion) contract to manufacture 200 Vande Bharat trains and maintaining
them for the next 35 years.

▪ In December 2022, GMR Airports Limited and NIIF announce partnership to invest in three airports. NIIF to invest
INR 6310 billion (US$ 76.1 billion) in upcoming greenfield airport at Mopa, North Goa.
▪ In 2020, GMR Hyderabad International Airport Ltd (GHIAL) has signed a concession agreement to commission,
operationalise and maintain the civilian enclave at the Bidar airport in North Karnataka.

▪ In November 2022, Adani Ports and Special Economic Zone Ltd (APSEZ), the largest transport utility in India, has
entered into a definitive agreement for the acquisition of Oiltanking India GmbH’s 49.38% equity stake in Indian
Oiltanking Ltd (IOTL), which is one of India’s largest developer and operator of liquid storage facilities.

Source: Company websites, Media sources

14
GROWTH DRIVERS AND OPPORTUNITIES

15
Growth drivers for Infrastructure in India

5. Public Private Partnerships

1. Government initiatives (PPP)

5
1

2. Infrastructure needs
2 4 4. International investment

3. Housing development

16
Government initiatives driving growth in the sector

2. ROADS AND AIRPORT 3. CONSTRUCTION

• In the Union Budget 2023-24, the government ▪ Under Budget 2023-24, Rs. 79,000 crore (US$ 9.5 billion) was allocated to the
has decided to raise the allocation towards the Pradhan Mantri Awas Yojana (PMAY), Rs 25,103 crore is earmarked for the
Roads Ministry by some 36% to Rs. 2.7 lakh urban sector and the rest for rural India.
crore (US$ 32.6 billion) for 2023-24. ▪ Any construction sector investment impacts 275 linked building materials,
• Under budget 2023-24, 50 additional airports, components and machinery industries, and the sector accounts for 8.2% of the
heliports, water aerodromes and advanced economy.
landing grounds will be revived for improving ▪ According to the ministry, as of 27 January 2023, work orders had been issued
regional air connectivity. for 7,804 Smart Cities Mission projects valued at Rs 1,81,322 crore (US$ 21.9
billion). Of these, 67.22 per cent or 5,246 projects valued at Rs 98,796 crore are
complete and 32.77 per cent, or 2,558 projects valued at Rs 82,526, are
expected to be complete by June this year.

4. TELECOM, ENERGY AND

POWER
1. RAILWAYS AND ▪ India is implementing many programmes for
green fuel, green energy, green farming,
METRO RAIL green mobility, green buildings, and green
• A capital outlay of Rs 2.6 lakh crore
(US$ 31.61 billion) has been provided
2 3 equipment, and policies for efficient use of
energy across various economic sectors.
for the Railways in 2023-24, which is the ▪ Also, the Budget 2023-24 allocated Rs.
highest ever outlay and about 9 times 97,579.05 crore (US$ 11.7 billion) for the
the outlay made in 2013-14. Department of Telecom.
• An UIDF will be established through the ▪ National Institute of Ocean Technology
use of priority sector lending shortfall, under the Ministry of Earth Sciences is
which will be managed by the National
Housing Bank, and will be used by
1 4 implementing an Ocean Thermal Energy
Conversion desalination plant at Kavaratti in
public agencies to create urban Lakshadweep, powered by about 65 kW
infrastructure in Tier 2 and Tier 3 cities. power generated from OTEC.

Source: Union Budget 2023-24, Media sources

17
Affordable Housing

Atal Mission for Tax benefit

Rejuvenation and • The Union Budget 2021 provided policy
impetus to achieve the ‘Housing for All by
Urban 2022’ vision through various measures
such as extension of tax relief for the
Transformation affordable housing segment.
• As per Union Budget 2021, the
(AMRUT) and government announced a tax proposal
for an additional deduction of Rs. 1.5 lakh
Smart Cities (US$ 2.06 thousand) shall be available
for loans taken up until March 31, 2022,
Mission for purchase of affordable house.

• In Union Budget 2023-24, the Indian

government allocated Rs.8,000
crore (US$ 973 million) for Smart
Cities Mission.
• As of December 2022, 64% of the
smart city projects had been
completed, with a total project worth
of Rs.92,439 crore (US$ 11 billion).

Ministry of Housing and

Urban Affairs
• In the Union Budget 2023-24, the government announced
Rs. 76,431 crore (US$ 9.2 billion) to the Ministry of
Housing and Urban Affairs.

Source: Union Budget 2021-22, Media sources

18
Infrastructure development in northeast India

▪ Investing in infrastructure would generate employment and would play a major role in thwarting secessionist movements in the Northeast region.

▪ In Budget 2023-24, there have been significant increases in the Ministry of Development of North Eastern Region (MDoNER) Scheme-wise outlays,
that will increase the impact in infrastructure, social-development and livelihood sectors in the NER.

▪ Finance minister Nirmala Sitharaman's Budget for 2023-24 underlines sustained focus on the northeast for "inclusive development" as one of the
seven priorities, which act as the 'Saptarishi' guiding the government "through the Amrit Kaal“.

▪ Budget 2023-24 highlights:

• For FY24, the budgetary allocation for the Ministry of Development of Northeastern Region stood at Rs. 5892 crore (US$ 711 million).

• Rs. 2,200 crore (US$ 265.5 million) allocated for Prime Ministers Development Initiative for North-East (PMDevINE) Scheme.

• Rs. 2491 crore (US$ 300.6 million) was allocated to North East Special Infrastructure Development Scheme (NESIDS).

▪ In 2022, India’s Finance Minister announced the execution of several rail, road and air connectivity projects worth Rs. 1,34,200 crore (US$ 16.2
billion) in the northeast.

▪ 4,000 km of roads, 20 railway projects for 2,011 km and 15 air connectivity projects are being developed.

▪ National waterways on the Ganges, Brahmaputra and Barak rivers (National Waterways (NW)-1 on the Ganges, NW-2 on the Brahmaputra and
NW-16 on Barak) are under development to provide better connectivity.

▪ As the cost of travel by water is the least when compared to air, road and rail networks, the riverine systems of India and Bangladesh can be
leveraged for all types of transportation.

▪ Along the Brahmaputra River, the development of the entire area between Sadiya and Dhubri in Assam is ongoing for improved connectivity.

▪ Multimodal hub that includes a ship repairing port at Pandu, four tourist jetties, and 11 floating terminals on the Brahmaputra in Guwahati is under
construction.

▪ North Eastern Region Power System Improvement Project (NERPSIP) is a major step towards economic development of the North Eastern Region
through strengthening of Intra - State Transmission and Distribution systems.

Source: Union Budget 2023-24, Media sources

19
Logistics and warehousing
▪ India's Logistics Market is estimated to be US$ 435.43 billion in 2023
and is expected to reach US$ 50.52 billion by 2028, growing at a CAGR
of 8.36%. Logistics market size
▪ India’s logistics market is estimated to reach US$ 410.75 billion in 2022
(US$ billion)
and is expected to reach US$ 556.97 billion by 2027, growing at a
CAGR of 6.28%. 500
▪ India intends to raise its ranking in the Logistics Performance Index to
25 and bring down the logistics cost from 14% to 8% of GDP, leading to 450
a reduction of approximately 40%, within the next five years.

435.4
400
▪ The logistics sector has attracted investments of Rs. 8,257 crore (US$

410.8
997.4 million) since the beginning of the year 2022.
350
▪ The growth of third-party logistics is the second-largest incentive
causing the rise in demand for warehouses. 300
▪ The warehousing market in India is expected to grow to Rs. 2243.79
billion (US$ 27 trillion) by 2026, expanding at a CAGR of 10.90%, as 250
per the Warehousing Market in India 2022 Report.
▪ Real estate PE investments registered an increase of 28% in Q1 FY23 200

215.0
as compared to Q1 FY22 driven by improved market sentiments,
widespread vaccine coverage, and the lifting of lockdown restrictions 150

160.0
helped this revival.
100
▪ In 2021, the Government’s Bharatmala project focused on establishing
35 multimodal logistics parks throughout the country, with four proposed 50
for development in Maharashtra under the Public-Private Partnership.
Such a mix of logistics operations is expected to boost the logistics and 0
warehouse operations in the country. 2017 2020 2022 2023*
▪ In addition, with India’s significant policy changes, the interest of foreign
investors to increase their footprint in the country by way of investments
in the warehousing and logistics sectors has witnessed an uptick.
▪ In 2021, the 3PL (third-party logistics) sector acquired the maximum
warehousing space, succeeded by e-commerce. Due to increasing
Foreign Direct Investments and relaxed policy reforms, the agriculture
and manufacturing sectors will continue to increase 3PL warehousing
demand.
* : Provisional
Source: Economic Survey, KPMG Report, News Articles

20
Airports infrastructure investment

1
Metro airports
▪ Upgradation/ Modernisation of airports' infrastructure is undertaken by the Airports Authority of India (AAI) and other Airport
Developers from time to time depending on the availability of land, commercial viability, socio-economic considerations, traffic
demand/willingness of airlines to operate to/from such airports.
▪ In December 2022, AAI and other Airport Developers have targeted a capital outlay of approximately Rs. 98,000 crore (US$ 11.8
billion) in the airport sector in the next five years for expansion and modification of existing terminals, new terminals and
strengthening of runways, among other activities.
▪ Delhi, Bangalore, Hyderabad, Lucknow, Mangaluru, Guwahati and Ahmedabad airports have earmarked a capital expenditure of
Rs.10,550 crore (US$ 1.2 billion), Rs.13,552 crore (US$ 1.6 billion), Rs. 6,288 crore (US$ 759 million), Rs.1,383 crore (US$ 167
million), Rs.567 crore (US$ 68.4 miilion), Rs.1,232 crore (US$ 148.7 million) and Rs.376 crore (US$ 45.3 million), respectively for
the period 2019-25.

2
Non-metro airports
▪ The Budget 2023-24 allocated Rs. 3,113.36 crore (US$ 375.7 million) to the union civil aviation ministry.
▪ Under Budget 2023-24, 50 additional airports, heliports, water aerodromes and advanced landing grounds will be revived for improving
regional air connectivity.
▪ Civil Aviation Ministry’s “Vision 2040” report states that there will be 190-200 functioning airports in India by 2040. Delhi and Mumbai will
have three international airports each, while the top 31 Indian cities will have two operational airports each.
▪ In the last five years (2017-2022), UDAN has significantly increased the regional air connectivity in India with the number of operational
airports increased to 141 as of August 2022.
▪ Under the UDAN scheme, 68 underserved/unserved destinations which include 58 Airports, 8 Heliports & 2 Water Aerodromes have
been connected.
▪ 220 destinations (airports/heliports/water aerodromes) under UDAN are targeted to be completed by 2026 with 1000 routes to provide
air connectivity to unconnected destinations in India.

Source: Media sources, PIB

21
Metro rail and monorail infrastructure investment

1
Metro rail
▪ India currently has the fifth-largest metro network in the world and will soon overtake advanced economies such as Japan and
South Korea to become the third-largest network.
▪ Metro rail network reached 810 kms and is operational in 20 cities as of September 2022.
▪ Metro network of 980 kms and Regional Rapid Transit System (RRTS) is currently under construction in 27 cities.
▪ In February 2023, Bharat Earth Movers Limited (BEML) signed the MoU with DMRC-led SPV to construct the Bahrain Metro Rail
Project Phase-1.
▪ In February 2023, Afcons Infrastructure commenced construction on the diaphragm wall (D-wall) for Kolkata Metro Line-6 (Orange
Line)’s underground airport tunnel as a component of Package ANVS-RVNL-1682.
▪ In 2021, Kochi has become India’s first city to have a Water Metro Project, which will connect 10 islands through 15 routes and will
cater to a daily ridership of more than 100,000 people across 78 kilometres of network.

2
Monorail
▪ At almost 20 kms, Mumbai monorail is the third largest route in the world after China with 98 kms and Japan with 28 kms.
▪ In March 2019, Mumbai Metropolitan Region Development Authority (MMRDA) commissioned the operations of the second phase
of the 19.54 km monorail project after it took over the operations and maintenance of the project.
▪ Japan International Co-operation Agency (JICA) assured technical assistance in urban monorail projects, intelligent transport
systems, Regional Rapid Transit Systems, transit-oriented development for preparing master plan and detailed project reports for
other urban infrastructure projects.

Source: Media sources

22
Increasing investments in Indian infrastructure

▪ The National Infrastructure Pipeline (NIP) for 2019-2025 is a first-of-its-kind, whole-of-government exercise to provide world-class infrastructure to
citizens, improving their quality of life.
▪ Infrastructure is the backbone of any country. Its development implies growth in all sectors of the economy, not to mention real estate, an indirect
beneficiary of every headwind in infrastructure sector. The PM Awas Yojna and the extended credit-linked subsidy scheme address the
affordability concern by provisioning increment in the PM Awas Yojna by 66% to 79,000 crores and extension of CLSS till 2027.
▪ FDI in construction development (townships, housing, built-up infrastructure and construction development projects) and construction
(infrastructure) activity sectors stood at US$ 26.23 billion and US$ 28.95 billion, respectively, between April 2000-September 2022.
▪ In January 2023, the Construction arm of Larsen & Toubro secured orders for its power transmission & distribution and buildings & factories
businesses to establish a 112.5MW Solar Power Plant in West Bengal and to construct a 600-bed super speciality hospital in Mumbai,
respectively.
▪ In December 2022, BHEL formed a consortium with Titagarh Wagons and is among five entities which have bid for the mega Rs. 58,000 crore
(US$ 7 billion) contract to manufacture 200 Vande Bharat trains and maintain them for the next 35 years.
▪ In December 2022, Mr. Nitin Gadkari, Minister of Road Transport and Highways inaugurated and laid the foundation stone of 8 National Highway
projects of 226 km length worth Rs. 1,800 crore (US$ 217.4 million) at Igatpuri, Nashik, Maharashtra.
▪ In December 2022, Mr. Nitin Gadkari, Minister of Road Transport and Highways inaugurated 7 National Highway projects worth Rs. 2,444 crore
(US$ 295 million) with a total length of 204 km in Rewa, Madhya Pradesh.
▪ In November 2022, the Prime Minister of India laid the foundation stone of various road projects worth over Rs. 2200 crore (US$ 2.6 billion),
namely the Medak-Siddipet-Elkathurthy section of NH-765DG; Bodhan-Basar-Bhainsa section of NH-161BB; Sironcha to Mahadevpur Section of
NH-353C in Telangana.
▪ In October 2022, National Highways Infra Trust (NHAI InvIT), the infrastructure investment trust sponsored by the National Highway Authority of
India (NHAI) to support the Government of India's National Monetization Pipeline, raised a sum of Rs. 1,430 crore (US$ 172.6 million) from
domestic and international investors through the placement of its units, for part funding its acquisition of three additional road projects from NHAI.
▪ As many as 52 critical infrastructure gap projects identified by MoPSW for connecting maritime ports and IWTs (Inland Waterway Terminals) to be
taken up under PM Gati Shakti National Master Plan. Currently, the DPR of a total of 56 projects (including 11 IWT projects) under this category
with a total of 1215 km length are under the bidding stage for the feasibility assessment of these projects, which is being carried out by NHAI.

Note: FDI - Foreign Direct Investment

Source: DPIIT, Media sources, EY, PIB

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New investments in Indian infrastructure

New Investment (US$ billion)

Sub-Sectors
FY17 FY18 FY19 FY20 FY21

Roads 43.043 68.302 41.405 16.51 27.222

Railways 45.89 22.269 32.032 13.325 1.703

Power Distribution 5.824 1.235 12.623 0.494 2.249

Power 21.138 13.572 24.934 16.679 13.039

Real Estate 14.69 19.305 17.407 17.342 12.558

Manufacturing 44.746 41.392 87.269 23.114 35.113

Mining 6.747 9.477 13.156 8.736 8.125

Source: PIB

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Key highlights of Union Budget 2023-24

▪ A capital outlay of Rs 2.6 lakh crore (US$ 31.61 billion) has been provided for the Railways in 2023-24, which is the highest ever outlay and about
9 times the outlay made in 2013- 14.

▪ Infrastructure Finance Secretariat is being established to enhance opportunities for private investment in infrastructure that will assist all
stakeholders in more private investment in infrastructure, including railways, roads, urban infrastructure, and power.

▪ The Government has decided to continue the 50-year interest-free loan to state governments for one more year to spur investment in
infrastructure and to incentivize them for complementary policy actions, with a significantly enhanced outlay of Rs 1.3 lakh crore (US$16 billion).

▪ A capital outlay of Rs 2.40 lakh crore (US$ 29 billion) has been provided for the Railways, which is the highest ever outlay and about 9 times the
outlay made in 2013- 14.

▪ 100 critical transport infrastructure projects, for last and first-mile connectivity for ports, coal, steel, fertilizer, and food grains sectors have been
identified and will be taken up on priority with an investment of Rs. 75,000 crore (US$ 9 billion), including Rs. 15,000 crore (US$ 1.8 billion) from
private sources.

▪ 50 additional airports, heliports, water aerodromes and advanced landing grounds will be revived for improving regional air connectivity.

▪ An Urban Infrastructure Development Fund (UIDF) will be established through the use of priority sector lending shortfall, which will be managed by
the National Housing Bank, and will be used by public agencies to create urban infrastructure in Tier 2 and Tier 3 cities.

▪ States will be encouraged to leverage resources from the grants of the 15th Finance Commission, as well as existing schemes, to adopt
appropriate user charges while accessing the UIDF.

▪ For realizing the vision of “Make A-I in India and Make A-I work for India”, three centres of excellence for Artificial Intelligence will be set-up in top
educational institutions.

▪ The Digital Public infrastructure for agriculture will be built as an open source, open standard and inter-operable public good that will enable
inclusive, farmer-centric solutions through relevant information services for crop planning and health, improved access to farm inputs, credit, and
insurance, help for crop estimation, market intelligence, and support for the growth of agri-tech industry and start-ups.

▪ 157 new nursing colleges will be established in co-location with the existing 157 medical colleges established since 2014.

Source: Union Budget 2023-24.

25
Key highlights of Union Budget 2023-24

▪ National Digital Library for Children and Adolescents will be set up for facilitating the availability of quality books across geographies, languages,
genres and levels, and device-agnostic accessibility. States will be encouraged to set up physical libraries for them at panchayat and ward levels
and provide infrastructure for accessing the National Digital Library resources.

▪ Skill India International Centres to be set up across different States to skill the youth for international opportunities.

▪ Central Processing Centre to be set up for faster response to companies through centralized handling of various forms filed with field offices under
the Companies Act.

▪ District Institutes of Education and Training to be developed as vibrant institutes of excellence for Teachers’ Training.

▪ States will be encouraged to set up a Unity Mall in their state capital or most prominent tourism centre or the financial capital for the promotion and
sale of their own ODOPs (one district, one product), GI products and other handicraft products, and for providing space for such products of all
other states.

▪ Since 2016-17, the budget for the Pradhan Mantri Awas Yojana, the flagship housing scheme of the government, has increased 280% from Rs.
20,936 crore (US$ 2.5 billion) in the revised estimates of 2016-17 to Rs. 79,590 crore (US$ 9.6 billion) in the latest 2023-24 budget.

▪ The Awas Yojana budget estimate for 2023-’24 constitutes an allocation of Rs. 25,103 crore (US$ 3 billion) to Pradhan Mantri Awas Yojana-Urban
and Rs. 54,487 crore (US$ 6.5 billion) to Pradhan Mantri Awas Yojana-Gramin.

Source: Union Budget 2022-23.

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Opportunities in Infrastructure

Urban Indian real Government initiatives

• In recent years, there has been a
estate substantial increase in the pace of
construction of national highways, from
• As a result of digitalisation and
an average of 12 kilometres per day in
opportunities that tier II and III
2014-15 to around 29 kilometres per day
cities present for economic
in 2021-22.
growth, the divide between metro
• In November 2022, National Investment
and non-metros is blurring,
and Infrastructure Fund (NIIF) is set up
moving to the new era of
as a collaborative investment platform
infrastructure growth.
between the Government of India, global
• Commercial real estate properties
investors, multilateral development
have witnessed exponential
banks (MDB) and domestic financial
growth in demand across Tier II &
institutions to facilitate investment across
III cities as Information technology
multiple sectors in India through an India
and Information technology-
Japan Fund.
enabled services and banking
• In June 2022, the Minister of Road
financial services and insurance-
Transport and Highways, opened 15
focused organizations are
national highway projects worth Rs.
increasingly decentralizing their
operations to adapt to the new National Infrastructure 13,585 crore (US$1.7 billion) in Patna
and Hajipur, Bihar.
normal.
• The residential sector has Pipeline • In March 2022, the Minister of Road
Transport and Highway, opened 19
witnessed good sales, and
• Started with 6,835 projects, the NIP project count now National Highway projects in Rajasthan
launches have also shown signs
stands at 9,142 covering 34 sub-sectors, as per news and Haryana, investing a total of Rs.
of an uptick during 2022, total
reports. 1,407 crore (US$ 183.9 million)
sales in the top-7 cities were
• Under the initiative, 2476 projects are under development • In October 2021, the Dubai government
projected to exceed 360,000 units
phase with an estimated investment of US$1.9 trillion. and India signed a contract in October
in 2022.
Nearly half of the under-development projects are in the 2021 to build infrastructure in Jammu
transportation sector, and 3,906 in the roads and bridges and Kashmir, including industrial parks,
sub-sector. IT towers, multipurpose towers, logistics
centres, medical colleges, and
specialized hospitals.
Source: Media sources, Ministry of Finance, M-SIPS - Modified Special Incentive Package Scheme, EDF - Electronics Development Funds

27
Key Industry Contacts

28
Key industry contacts

Agency Contact Information

Address: G 5 and 6, Sector 10, Dwarka

National Highways Authority New Delhi - 110 075
of India (NHAI) Phone: 91-11-25074100, 25074200
Fax: 91-11-25093507, 25093514
Website: nhai.gov.in

Address: Rajiv Gandhi Bhawan, Safdarjung Airport,

Airports Authority of India New Delhi - 110003
(AAI) Tel: 91-11-24632950
Website: www.aai.aero

Infrastructure Industry And Address: P-95, South Extension Part - II

Logistics Federation of India New Delhi - 110049
(ILFI) Phone: 91-11-41007091
Fax: 91-11-41007093
Email: dgoffice@ilfi.in, ilfi@ilfi.in
Website: www.ilfi.in

29
Appendix

30
Glossary

▪ FY: Indian Financial Year (April to March) - So, FY11 implies April 2010 to March 2011

▪ FDI: Foreign Direct Investment

▪ CAGR: Compounded Annual Growth Rate

▪ GOI: Government of India

▪ R&D: Research and Development

▪ JV: Joint Venture

▪ SEZ: Special Economic Zone

▪ BOT: Build-Operate-Transfer

▪ IBEF: Indian Brand Equity Foundation

▪ NHAI: National Highways Authority of India

▪ PPP: Public-Private-Partnership

▪ Wherever applicable, numbers have been rounded off to the nearest whole number

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Exchange rates

Exchange Rates (Fiscal Year) Exchange Rates (Calendar Year)

Year Rs. Equivalent of one US$ Year Rs. Equivalent of one US$
2004-05 44.95 2005 44.11
2005-06 44.28 2006 45.33
2006-07 45.29 2007 41.29
2007-08 40.24 2008 43.42
2008-09 45.91 2009 48.35
2009-10 47.42 2010 45.74
2010-11 45.58 2011 46.67
2011-12 47.95 2012 53.49
2012-13 54.45 2013 58.63
2013-14 60.50 2014 61.03
2014-15 61.15 2015 64.15
2015-16 65.46 2016 67.21
2016-17 67.09 2017 65.12
2017-18 64.45 2018 68.36
2018-19 69.89 2019 69.89
2019-20 70.49 2020 74.18
2020-21 73.20 2021 73.93
2021-22 74.42 2022 79.82
2022-23 78.60 2023* 82.78

Note: *- Until August 2023

Source: Foreign Exchange Dealers’ Association of India

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