Snapshot
Building a Sustainable Future
The Construction industry in India consists of the Real estate as well as the Urban development segment. The Real estate segment covers residential, office, retail, hotels and leisure parks, among others. While Urban development segment broadly consists of sub-segments such as Water supply, Sanitation, Urban transport, Schools, and Healthcare.
- Policy Support - In March 2021, the Parliament passed a bill to create a $ 2.5 Bn development finance institution called National Bank for Financing Infrastructure and Development (NaBFID) to fund infrastructure projects in India.
- FDI in the construction development sector (townships, housing, built up infrastructure and construction development projects) and construction (infrastructure) activities stood at $26.30 bn and $29.20 bn respectively, between April 2000 and December 2022.
- 100% Foreign direct investment in the construction industry in India under automatic route is permitted in completed projects for operations and management of townships, malls/shopping complexes, and business constructions.
- 100% Foreign direct investment in the construction industry is allowed under the automatic route for urban infrastructures such as urban transport, water supply, sewerage, and sewage treatment.
For further details, please refer FDI Policy
- %
Share in India's GDP
- Mn
People employed
Explore Related Sub Sectors
Second largest employer in India
Sixth largest FDI recipient sector for India in 2022
Third largest construction market globally by 2025
- Industry Scenario
- FOREIGN INVESTMENT
- INDUSTRY TRENDS
- POLICIES & SCHEMES
Industry Scenario
The construction Industry in India is expected to reach $1.4 Tn by 2025.
- Cities Driving Growth - Urban population to contribute 75% of GDP (63% present), and 68 cities will have a population of more than 1 Mn.
- The construction industry market in India works across 250 sub-sectors with linkages across sectors.
- Residential- By 2030, more than 40% of the population is expected to live in urban India (33% today), creating a demand for 25 Mn additional mid-end and affordable units.
- Under NIP, India has an investment budget of $1.4 Tn on infrastructure - 24% on renewable energy, 18% on roads & highways, 17% on urban infrastructure, and 12% on railways.
- Schemes such as the revolutionary Smart City Mission (target 100 cities) are expected to improve quality of life through modernized/ technology driven urban planning.
- 54 global innovative construction technologies identified under a Technology Sub-Mission of PMAY-U to start a new era in Indian construction technology sector.
- Over 3,500 cities have certified as ODF+ and 1,191 cities as ODF++ under SBM-U.
- 35 Multimodal Logistics Parks (MMLPs) to be developed at a total capital cost of $ 6.1 Bn, will cater to 50% of the freight movement.
Union Budget 2023 Highlights:
- INR 10 Lakh Crore: 33% Increase in capital Investment Outlay
- The outlay for PM Awas Yojana is being enhanced by 66 % to over 79,000 cr
- Urban Infrastructure Development Fund: INR 10,000 Cr Outlay per year to create urban infrastructure in tier 2 & 3 cities
GROWTH DRIVERS
Smart cities
100 smart cities currently. Mission to improve quality of life through modernized/technology driven urban planning
Industrial corridors
Eleven industrial corridors planned
Data Centres
Real estate demand is set to increase by 15-18 Mn sq. ft. by 2025 across major cities
Cold storage
Expected to add an incremental of ~10 Mn Tonnes by 2023.
Growth in the logistics sector
Demand for warehousing stock from 287 mn sq ft (2021) to 500 mn sq ft (2030) in the top 8 Tier – 1 cities, with significant Grade A stock

