Indian Govt Targets Rs 1 Trillion Investment in Highways by 2027

India is gearing up to attract private investment back into highway construction, marking a significant shift after a decade of investor retreat due to revenue risks and bureaucratic delays.

The government is drafting new rules aimed at offering revenue protection for developers and enticing global funds to bid for expressway projects.

These reforms are expected to be finalized this month, with a target of awarding Rs 1 trillion ($11 billion) worth of projects to the private sector by fiscal year 2027, according to sources familiar with the matter.

Prime Minister Narendra Modi's administration is aiming to generate a larger proportion of private investment in the development of highways, moving from low levels now to a projected 25% by next year. The need for private funds has been spurred on by India's pressing needs for more infrastructure, as currently there are mostly only public funds available to support its expansions.

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The government of India is also making efforts to foster the participation of corporate companies in infrastructure projects. This includes privatization, i.e., selling off loss-making airports and forging partnerships with foreign entities to increase shipbuilding capabilities.

The new framework will effectively address several concerns brought to the attention of the government by the industry, such as a lack of prompt approval of permits and the erosion of revenues due to competition from alternate sources of funding.

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With an Infrastructure Risk Guarantee Fund and global investment potential, India aims to modernize its road network and strengthen its economic competitiveness.