Market Trends of India Construction Industry
This section covers the major market trends shaping the India Construction Market according to our research experts:
Infrastructure projects drives the market
As part of the Sagarmala Program, more than 610 projects with a total cost of USD 10.5 million will be carried out between 2015 and 2035. These projects will focus on modernizing and building new ports, improving port connectivity, boosting port-linked industrialization, and building up coastal communities.
Bharatmala Pariyojana is a new highway umbrella program that focuses on improving the efficiency of freight and passenger movement across the country by bridging critical infrastructure gaps with effective interventions such as the development of Economic Corridors, Inter Corridors and Feeder Routes, National Corridor Efficiency Improvement, Border and International Connectivity Roads, Coastal and Port Connectivity Roads, and Green-field expressways.
In 2022-2023, the PM Gati Shakti Master Plan for Expressways will be implemented, allowing for faster transit. The National Highway network would be expanded by 25,000 kilometers in 2022-203, at a cost of INR 20,000 crore (USD 2417670).
In 2022, India's road sector experienced enormous growth as additional stretches of national highways were constructed, as well as the approval and completion of several projects and fundraises, making it a better year than the previous one. an integrated multi-modal national network of transportation and logistics, connectivity with isolated and difficult terrains; and decongestion of key sites on the road network.
The government approved the development of 21 greenfield airports in the country in January 2022. The country's largest airport will be built in Uttar Pradesh's Gautam Buddha Nagar area. The Ministry of Civil Aviation intends to build 21 additional airports across India in the next few years.
In the next four to five years, the Airports Authority of India (AAI) plans to create new airports as well as expand and upgrade many existing airports at a cost of USD 338 million. This comprises the expansion and alteration of existing terminals, the construction of new terminals, the expansion or strengthening of existing runways, technical blocks, aprons, and the control towers of the Airport Navigation Services. In addition, by 2025, three PPP (Public-Private Partnership) airports in Delhi, Bengaluru, and Hyderabad will have invested INR 30,000 crore in expansion plans.
Rising Residential Property Sales
In the first half of 2022, around 44 thousand housing units were sold in Mumbai, India's most demanding residential housing market. All the eight biggest metropolitan areas of India recorded a significant increase in housing sales, according to Knight Frank. Private market investor, Blackstone, which has significantly invested in the Indian real estate sector (worth Rs. 3.8 lakh crore (USD 50 billion), is seeking to invest an additional Rs. 1.7 lakh crore (USD 22 billion) by 2030.
Driven by increasing transparency and returns, there's a surge in private investment in the sector. Indian real estate attracted USD 5 billion in institutional investments in 2020, equivalent to 93% of transactions recorded in the previous year. The real estate segment attracted private equity investments worth Rs. 23,946 crores (USD 3,241 million) across 19 deals in Q4 FY21. In the first half of 2021, India registered investments worth USD 2.4 billion into real estate assets, a growth of 52% YoY.
Construction is the third-largest sector in terms of FDI inflow. FDI in the sector (including construction development & activities) stood at USD 54.17 billion from April 2000 to March 2022. According to a major property consultant, institutional investments in the Indian real estate sector are expected to increase by 4% to reach Rs. 36,500 crores in 2021, driven by the rising interest of investors towards capturing attractive valuations amid the pandemic.
The residential property market in the third quarter of 2022 has seen decent performance in the top cities in the country, both from the point of view of sales as well as new launches.The new launches of residential property were at 83,241 units in the July-September quarter which was an 11% rise year-on-year. However, sequentially, the sales in the third quarter fell 15% from 97,745 units in the preceding quarterBengaluru recorded the highest year-on-year growth in sales at 41%, an increase of 5% from the immediately preceding quarter whereas Pune witnessed a jump of 9% in sales
