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. 

    • United Nations projects India’s population to be 1.64 Bn by 2047, an estimated 51% of India’s population is likely to be living in urban centres. 
    • One of the leading recipients of FDI in the country; construction development sector inflows $26.42 Bn (April 2000-June 2023)    
    • 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

    The construction Industry in India is expected to reach $1.4 Tn by 2025.

    • Cities Driving Growth - By 2030, cities are expected to generate 70% of India’s GDP (MGI, 2011). 
    • The construction industry market in India works across 250 sub-sectors with linkages across sectors.
    • Residential- An estimated 600 Mn people are likely to be living in urban centres by 2030, 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.
    • Since 2014, over INR 18 Lakh Cr has been invested in urban transformation.

    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

      372 Cold Chain Projects across states with a total capacity of ~10.28 Lakh MT of cold storage/CA/MA storage/Frozen Store have been approved till 06.10.2023.

    • Growth in the logistics sector

      In 2021 and 2022, institutional real estate investment in warehouses accounted for 27%. The Indian warehousing stock is expected to reach nearly 500 mn. sqft by 2025 in the top 8 Tier – 1 cities, with significant Grade A stock.

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    Logistics

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    Technology Sub-Mission Under PMAY-U

    FAQs

    Frequently
    Asked Questions

    What are investment opportunities under Swachh Bharat Mission?

    Some of the investment opportunities are:

    1. Solid & Liquid Waste Management
    2. Wastewater Management
    3. Construction of Toilets 
    4. In February 2021, the government allocated Rs. 141,678 crore (US$ 19.22 billion) to tackle water, land & air pollution besides waste management over the next five years.
    5. In October 2020, the National Bank for Agriculture & Rural Development (NABARD) disbursed Rs. 12,298 crore (US$ 1.66 billion) under the Swachh Bharat Mission Gramin (SBM-G) for construction of 32.9 million household toilets.


     

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    What is 'Smart Cities' program of the Indian government?

    Government of India has launched a new urban development mission. Target is to develop 500 cities, which include cities with a population of more than 100,000 and some cities of religious and tourist importance. These cities will be supported and encouraged to harness private capital and expertise through Public Private Partnerships (PPPs), to holster their infrastructure and services in the next 10 years. The strategic components of Area-based development in the Smart Cities Mission are:
    1) City improvement (retrofitting).
    2) City renewal (redevelopment).
    3) City extension (greenfield development).
    4) Pan-city initiative in which Smart Solutions are applied covering larger parts of the city.
    Please refer to these links for further details.

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    How can we get our propriety building technology for affordable housing, certified and approved by government?

    Building Materials and Technology Promotion Council does evaluation, validation and certification of innovative building materials and construction technologies under performance appraisal certification scheme. For details please refer to link.

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    What kind of real estate business activities are prohibited for foreign investment?

    FDI is not permitted in an entity which is engaged or proposes to engage in real estate business, construction of farm-houses and trading in transferable development rights (TDRs). “Real estate business” means dealing in land and immovable property with a view to earning profit there from and does not include development of townships, construction of residential/ commercial premises, roads or bridges, educational institutions, recreational facilities, city, regional level infrastructure and Real Estate Investment Trusts (REITs) registered and regulated under the SEBI (REITs) Regulations 2014. Further, earning of rent/ income on lease of the property, not amounting to transfer, will not amount to real estate business.

    For further details, please refer to latest FDI Policy 2020 at the following link.

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    What are the types of construction-development projects in which foreign investors/companies can invest in India?

    Government has permitted 100% equity under automatic route for construction-development projects (which would include development of townships, construction of residential/commercial premises, roads or bridges, hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional level infrastructure, townships).

    We would also request you to refer to some conditions under which the investment in this sector is governed, as mentioned under section 5.2.10 of latest FDI Policy 2020.

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