Highway to growth
The total road network in India is 6.2 mn km comprising all categories of roads - national & state highways and urban & rural roads. National Highways (NH) account for 2% of the total road network and carry over 40% of total traffic.
There has been a consistent increase in the construction of National Highways, with 13,327 kms being constructed in 2020-21, from 4,410 km of NH construction in 2014-15.
India has a well-developed framework for Public-Private-Partnerships (PPP) in the highway sector. Asian Development Bank ranked India at the first spot in PPP operational maturity and also designated India as a developed market for PPPs.
In the last 7 years, the length of NHs has gone up by more than 50% from 91,287 km, as on April 2014, to around 1,41,000 km now. The pace of construction has increased more than 3 times, from 12 km per day in 2014-15 to 37 km per day in 2020-21.
The Government has set an ambitious target in Budget 2022-23 of expanding the National Highway network by 25,000 kms over the fiscal year.
The BharatMala Pariyojana, launched in 2017, aims to build about 65,000 km of national and economic corridors, border and coastal roads, and expressways, to optimize the efficiency of already built highway infrastructure. It is envisaged that the programme will provide 4-lane connectivity to 550 districts, develop 50 economic corridors of about 26,000 km, increase the vehicular speed by 20-25%, reduce the supply chain costs by 5-6%, and improve the NH network to carry 70-80% of total road traffic. The first phase of the programme will develop 34,800 km of highways, at an estimated outlay of INR 5,35,000 crore.
100% FDI in roads and highways is allowed under automatic route.
For further details, please refer FDI Policy
Avg. highway constructed per day in FY 2020-21
National highway construction in FY 2020
Share of GDP on logistics & transportation
Projects awarded under PPP
$275 Billion to be invested on roads under NIP between 2019 and 2025
Highest ever construction of 37 km per day of National Highways in 2020-21
12,205.25 km National Highways constructed in India during FY 2020-21
- Industry Scenario
- FOREIGN INVESTMENT
- INDUSTRY TRENDS
- POLICIES & SCHEMES
The GoI has given a massive push to infrastructure by allocating about $1.4 Tn for infrastructure to be invested until 2025.
The government has forecasted an investment of $350 bn towards road infrastructure in the North-East region of India during 2020-2025.
The market for roads and highways in India is projected to exhibit a CAGR of 36.16% during 2016-2025, on account of growing government initiatives to improve transportation infrastructure in the country. Almost 40% (824) of the 1,824 PPP projects awarded in India until December 2019 were related to roads.
The highways sector in India has been at the forefront of performance and innovation. The government has successfully rolled out over 60 road projects in India worth over $10 bn based on the Hybrid Annuity Model (HAM). HAM has balanced risk appropriately between private and public partners and boosted PPP activity in the sector.
Asset recycling, through the toll-operate-transfer (ToT) model has been taken up by the National Highways Authority of India (NHAI) for 100 highways. The first two bundles of 9 highways each were monetized successfully for an investment of over $2 bn.
As one of the biggest reforms in the road transportation industry in India, the NHAI has gone ‘Fully Digital’, with the launch of a unique cloud-based and Artificial Intelligence-powered Big Data Analytics platform – Data Lake and Project Management Software. The entire project management work flow of NHAI is transformed from manual to online portal based, wherein the complete project execution operations including ‘workflow with time lines’ and ‘alert mechanism’ have been configured. All project documentation, contractual decisions and approvals are now being done through portal only.
Massive infrastructure push
$1.4 Tn to be invested for infrastructure from 2020-25
Length of national highways to reach 200,000 km
Production of all vehicle segments reached 26 mn
Standardized process for bidding and tolling