Key Challenges and Opportunities in India's Road Construction Sector

India's road construction industry is facing a major downturn, with the construction pace expected to fall to a five-year low of 25-26 kilometers per day during the fiscal year 2025-26, according to a report by the domestic rating agency Icra.

The agency attributes this decline to prolonged monsoon seasons and a significant decrease in project awards over the last two years, forecasting a road execution of over 9,000 kilometers for FY26—a downward revision from previous estimates of 9,500-10,000 kilometers.

Despite these challenges, Icra anticipates project awards from the Ministry of Road Transport and Highways to increase in the latter half of FY26, fueled by streamlined project award protocols requiring comprehensive pre-approval processes. Moreover, strategies like the Toll-Operate-Transfer bundles could help the National Highways Authority of India achieve significant monetization goals.

(With inputs from agencies.)