India is in the middle of a multi-year drive to increase the capacity and quality of its infrastructure. An update on the developments over the past financial year or 15 months is, therefore, only a snapshot of the work in progress. That being said, the previous fiscal (FY 2025) started weak, with project delays and tardy awards due to the general elections. Activity did pick up pace later in the fiscal year, with steady progress made across most sectors. Trends across sectors include the induction of new technologies, an increased focus on local manufacturing and a commitment to sustainability.
Financial overview
Union Budget 2025-26 maintained allocation for infrastructure at Rs 11 trillion. Infrastructure players also tapped several other sources of financing. NTPC Green Energy Limited, for instance, listed on the stock exchanges, raising Rs 100 billion through its initial public offering (IPO). Afcons Infrastructure Limited (Rs 54.3 billion), Waaree Energies Limited (Rs 43.21 billion), ACME Solar Holdings Limited (Rs 29 billion), Premier Energies Limited (Rs 28.3 billion) and Ather Energy (Rs 29.84 billion) also had successful listings.
Infrastructure investment trusts (InvITs) and real estate investment trusts (REITs) raised Rs 47.28 billion and Rs 267.15 billion respectively, and the combined assets under management (AUM) of these now exceed Rs 9 trillion. The Employees’ Provident Fund Organisation invested Rs 20.35 billion in the National Highways Infra Trust (the National Highways Authority of India’s InvIT), its first-ever InvIT investment. PropShare Platina raised Rs 3.53 billion through its IPO under the new small and medium REIT category.
Infrastructure bonds raised Rs 945 billion. Municipal bonds were issued by the Greater Chennai Corporation, Pimpri Chinchwad Municipal Corporation, Rajkot, Varanasi and Gandhinagar. Green bonds, sustainability-linked bonds, and environmental, social and governance bonds also saw traction, with over Rs 87 billion issued across 27 deals.
Infrastructure continued to attract private equity and venture capital investors, with total deal values crossing Rs 3 trillion in 200-plus deals. Noteworthy mergers and acquisitions included the Air India-Vistara and Air India Express-AIX Connect mergers, while Ambuja Cement Limited’s takeover of Penna and Orient Cement, and UltraTech Cement’s acquisition of India Cements and Star Cement, led to consolidation in the cement industry.
Bank exposure increased as the model concession agreement offered greater comfort to lenders. There were several financial closures, such as Bharat Petroleum Corporation Limited’s (BPCL) Rs 318 billion loan from a consortium of six banks for its Bina refinery project.
A brief round-up of the activity across various sectors…
Roads
Road construction under the Bharatmala Pariyojana and the Pradhan Mantri Gram Sadak Yojana continued, though land acquisition issues persist. Around 10,660 km of national highways were constructed, a year-on-year decline of 14 per cent. As of February 2025, project awards stood at 4,874 km, but activity is expected to pick up with the Ministry of Road Transport and Highways targeting Rs 15 trillion worth of projects over the next two years.
Under the National Monetisation Pipeline Phase I, roads mobilised Rs 1.15 trillion. Under Phase II, the target for road monetisation is Rs 3.5 trillion. Road InvITs account for an AUM of Rs 2.4 trillion, which is expected to reach Rs 3.27 trillion by March 2026.
Civil aviation
The aviation network is connecting smaller destinations, with 10 airports likely to be operationalised in FY 2026 under the Ude Desh ka Aam Naagrik (UDAN) scheme. Airports handled over 411 million passengers in FY 2025, a 9.4 per cent year-on-year growth. Freight handling grew 10.5 per cent year-on-year to over 3.7 million tonnes (mt). Meanwhile, a modified UDAN scheme is on the cards to connect 120 new destinations.
The sector witnessed notable mergers. AIX Connect (formerly AirAsia India) and Air India Express formed a low-cost carrier, and Vistara merged with Air India to create a combined entity with over 26 per cent domestic market share. IndiGo continues to dominate the market with over 64 per cent share. Meanwhile, Akasa Air has a market share of around 5 per cent. New entrants such as Shankh Air, Air Kerala and Alhind Air have received no-objection certificates.
Renewable energy
During 2024-25, solar contributed 23.83 GW and wind 4.1 GW to new capacity additions. In 11 auctions since April 2024, solar units hit an average L1 tariff of Rs 2.48 per kWh, while eight wind auctions since April 2024 and six in the past year recorded average L1 tariffs of Rs 3.56 per kWh. The sector also saw momentum in storage, hybrids, bioenergy, pumped storage projects (PSPs) and green hydrogen. Biogas, biomass and related technologies contribute 11.6 GW of capacity (as of July 31, 2025). Policy support is also in place for segments such as compressed biogas (CBG), ethanol blending and biomass co-firing. The policy thrust has expanded to manufacturing, with the Ministry of New and Renewable Energy introducing the Approved List of Models and Manufacturers-II for solar PV cells. Solar module capacity has risen to 100.23 GW (as of July 2025), while solar cell capacity is 26.35 GW.
The Green Hydrogen Certification Scheme of India will verify and certify emissions from renewable-based hydrogen production. Deendayal, Paradip and V.O. Chidambaranar ports have been identified as green hydrogen hubs, while multiple green ammonia auctions are on the anvil.
Energy storage projects are receiving attention. The viability gap funding scheme for battery energy storage systems (BESSs) covers 30 GWh of capacity, with Rs 54 billion of funding. Interstate transmission charges have been waived for PSP and BESS projects commissioned before June 30, 2028. In 16 stand-alone BESS auctions in FY 2025, the lowest and highest tariffs discovered have ranged from Rs 208,000 per MW per month to Rs 457,000 per MW per month. There are 69 PSPs at various stages of development, with a total capacity of 87.5 GW. Another 64.8 GW of PSPs are at the survey stage.
The ethanol blending programme has advanced significantly, with blending levels rising from 1.53 per cent in 2014 to 19.92 per cent in June 2025. Biodiesel procurement grew to 439.9 million litres in 2024, from 11.9 million litres in 2015-16. Meanwhile, BPCL is exploring the use of CBG in Chhattisgarh under the Sustainable Alternative Towards Affordable Transportation scheme. CBG blending into city gas distribution (CGD) networks is also under consideration.
Oil and gas
India imports around 85 per cent of its crude oil and over 50 per cent of natural gas, and it will have to double its gas imports by 2030 in order to meet demand. To reduce import dependencies, policy efforts are focused on boosting upstream exploration and production (E&P). India also has surplus refining capacity, which enables product exports to help offset imports.
The Ministry of Petroleum and Natural Gas has awarded contracts for 28 blocks under the ninth round of the open acreage licensing Policy (OALP). The 10th round of the OALP offers 25 blocks across 191,986 square km. The fourth round of discovered small field auctions and special coal bed methane bids offer 55 fields across nine contract areas, with estimated reserves of 260 mt of oil equivalent.
Oil and Natural Gas Corporation Limited (ONGC), BP Exploration (Alpha) Limited and Reliance Industries Limited have signed an agreement for offshore exploration in the GS-OSHP-2022/2 Block of the Saurashtra basin, Gujarat. Further, ONGC has made four oil reserve discoveries in West Bengal. Oil India Limited has commenced E&P activities in Tripura, while Assam is set to be the first state government to participate in upstream oil production, following the discovery of hydrocarbons at the Namrup Borhat 1 well in Dibrugarh district.
India’s gas pipeline network is undergoing significant expansion, and refining capacity is also growing. The country’s refineries can handle a wide variety of crudes and are increasingly adopting new technologies, digitalisation and petrochemical integration. Meanwhile, the CGD network continues to grow, with the Petroleum and Natural Gas Regulatory Board authorising 307 geographical areas covering 733 districts.
Telecom
Digital India requires state-of-the-art telecom networks and massive data storage capacities. There is also an emphasis on the localisation of key components. The draft National Telecom Policy, 2025 aims to transform India into an exporter of electronic goods and services, establishing the country as a global centre for innovation and research and development. It also aims to create employment and double the contribution of information and communication technology to the country’s GDP.
Reliance Jio and Bharti Airtel have spent over $36 billion in acquiring 5G spectrum and rolling out networks. As of June 2025, 5G is available in 99 per cent of districts. Bharat Sanchar Nigam Limited (BSNL) has soft-launched quantum 5G fixed wireless access, and Vodafone Idea Limited (Vi) is rolling out 5G in select cities.
A key initiative has been the creation of the Financial Fraud Risk Indicator by the Department of Telecommunications (DoT) to tackle cyber fraud. The “Safer Internet India” coalition, involving companies such as Airtel, Vi, Microsoft, Google and Meta, is also tackling this issue, and Airtel has launched an artificial intelligence (AI)-powered spam-fighting network.
Starlink has received approvals from the Indian National Space Promotion and Authorisation Centre and the DoT to operate in India, becoming the third satellite broadband licence holder in the country. The Telecom Regulatory Authority of India has released recommendations on the terms and conditions for spectrum assignment. The rising adoption of new technologies, online payments, cloud services, etc. is driving demand for data centres, where many players have made significant investments. The sector is also advancing its decarbonisation efforts to ensure greener operations.
The centre has approved a new framework enabling government departments and organisations to acquire assets held by BSNL, Mahanagar Telephone Nigam Limited (MTNL) and ITI Limited without the need for auctions. BSNL and MTNL together have mobilised Rs 129.85 billion so far from the monetisation of assets.
Railways
Indian Railways (IR) is scaling up the production of rolling stock, upgrading tracks and signalling systems, and adopting advanced technology. Safety is being enhanced with the deployment of Kavach systems across the railway network, while AI and machine learning are being used to improve operations and safety. IR is also exploring new non-fare revenue streams, such as the commercial use of railway land.
The Mumbai-Ahmedabad high-speed rail corridor project is progressing. BEML Limited has signed a non-binding MoU with TuTr Hyperloop Private Limited to develop indigenous hyperloop and other high-speed transport technologies. DP World, the Deendayal Port Authority and Nevomo have signed an MoU for a 750 metre magnetic rail pilot project at Deendayal (Kandla) port. Further, a production line for Vande Bharat Sleeper trainsets has been inaugurated by Titagarh Rail Systems Limited and Bharat Heavy Electricals Limited, in line with the Rs 240 billion contract awarded by IR.
IR is exploring partnerships with other countries. The Ministry of Railways has signed an MoU with Spain’s Ministry of Transport and Sustainable Mobility to enable cooperation in conventional and high-speed rail. IR has also renewed its MoU with the Federal Department of Environment, Transport, Energy and Communications of the Swiss Confederation. Further, the government has signed an MoU with the Bangladeshi government to boost regional connectivity.
Ports and shipping
While major ports handle 54 per cent of the overall traffic, non-major ports are catching up by offering higher efficiency and lower turnaround times. Inland waterways are emerging as an alternative channel for cargo.
New legislation, such as the Coastal Shipping Bill, 2025, the Carriage of Goods by Sea Bill, 2025, the Merchant Shipping Bill, 2025, and the Indian Ports Bill, 2025, will usher in further policy changes. The sector is adopting automation, AI, drones and digital platforms to drive efficiency and sustainability.
The public-private partnership model has played a key role in modernising terminals and attracting investments of Rs 550 billion over the past 25 years. Recently, the port sector has also begun adopting the operations and maintenance model.
Cochin Shipyard Limited has signed an agreement with South Korea’s HD Korea Shipbuilding & Offshore Engineering. Hindustan Shipyard Limited is planning to set up a shipyard in Andhra Pradesh. The Rs 5.56 billion Mumbai International Cruise Terminal has been inaugurated following eight years of construction.
Urban transport
Metro rail and mass rapid transit system projects were allocated Rs 348.07 billion in Union Budget 2025-26. Various state governments and transport agencies have also committed funds to metro and regional rapid transit system (RRTS) projects.
The Asian Development Bank has announced a five-year initiative, where up to $10 billion, including third-party capital, could be directed to metros, RRTS corridors, etc.
KfW Germany has signed an agreement with the Government of India (GoI) worth Rs 30.45 billion (Euro 340 million) for the Bengaluru Metro Project Phase II. The Japan International Cooperation Agency and the GoI have signed a loan agreement worth Rs 46.49 billion for corridors of the Delhi Metro Project Phase IV.
Various new metro segments were inaugurated across cities. These include the Pune Metro section connecting District Court to Swargate; two stretches of Ahmedabad Metro Phase II; the Aarey-Bandra Kurla Complex (BKC) stretch under Line 3 of Mumbai Metro Phase I; the 3.14 km extension of Bengaluru’s Namma Metro Green Line from Nagasandra to Madavara; and the 2.8 km Janakpuri West-Krishna Park Extension stretch of Delhi Metro Phase IV. In addition, the 9.6 km BKC-Acharya Atre Chowk stretch of Line 3 of Mumbai Metro Phase I; the 6 km Gandhi Nagar to Station 3-Super Corridor of Indore Metro Phase I; and the Motijheel-Kanpur Central stretch of Kanpur Metro Phase I were inaugurated.
New transport modes such as the RRTS, MetroLite, MetroNeo and water metro are being explored. The 13 km Sahibabad-New Ashok Nagar stretch of the Delhi-Ghaziabad-Meerut RRTS project was inaugurated, and operations have commenced on the 8 km Modi Nagar-Meerut South stretch.
Operations have started on the Eloor-High Court Junction stretch under the Kochi Water Metro Project in April 2025, and the Karnataka government has approved the Mangaluru Water Metro Project. Kochi Metro Rail Limited has submitted a feasibility study for the Mumbai Water Metro Project.
All trains running on the Magenta Line of Delhi Metro now feature driverless operations. Bengaluru Metro has received its first indigenously manufactured driverless trainset from Titagarh Rail Systems Limited for the Yellow Line.
Water and sewerage
The Atal Mission for Rejuvenation and Urban Transformation and the Swachh Bharat Mission (SBM)-Urban have been allocated Rs 100 billion and Rs 50 billion respectively in Union Budget 2025-26.Further, the Jal Jeevan Mission has been allocated Rs 670 billion, SBM-Grameen has been allocated Rs 71.92 billion, and the Namami Gange Mission II has been allocated Rs 34 billion.
Devangshu Datta
