Why this is important to Wisconsin businesses: The government aims to add 200,000 more kilometers over the next five years, as well as restoring or replacing 147 bridges.
India’s road network is the world’s second-largest, spanning 5.5 million kilometers. This network transports over 65% of all goods and 85-90% of the country’s total passenger traffic.
Road infrastructure development has been a priority for the government of India, with the sector receiving strong budgetary support over the years. Under the present government, $10.9 billion has been allocated to the Ministry of Road Transport & Highways (MoRTH) for setting up and improving road infrastructure. This includes $1.77 billion in revenue expenditure and $9.14 billion for capital expenditure.
Meanwhile, public-private partnerships (PPPs) are gaining importance due to government support. Of the 1,531 PPP projects awarded as of March 2018, a total of 742 were related to roads. The Asian Development Bank has ranked India at No. 1 in PPP operational maturity and also designated the country as a “developed market” with regard to PPPs.
Under the existing policy, the government of India allows 100 percent foreign direct investment through the automatic route in for road and highway construction and maintenance. As a result, several companies from China, Italy, Malaysia, Russia, the UK and the UAE have formed partnerships with Indian players to capitalize upon the opportunities offered by the sector.
MoRTH now aims to expand the existing stretch of 120,000 kilometers of the national highway network to add 200,000 more kilometers over the next four to five years under various programs. The government plans to invest around $22.4 billion in roads in northeast India from 2018 to 2020.
The ministry recently launched the “Bharatmala Pariyojana” initiative, which will connect most Indian states, to construct 83,677 kilometers of highway at the cost of $74 billion. Under the project, special emphasis will be given to provide connectivity to far-flung border and rural areas, including the tribal and less developed areas. Bharatmala will connect 550 district headquarters (from the current 300) by a minimum 4-lane highway and raise the number of corridors to 50 (from the existing six).
Indian road infrastructure presents the following investment opportunities:
- Highway construction and maintenance
- Construction of new expressways as part of Bharatmala Pariyojana
- Restoration/replacement of 147 bridges under the Indian bridge management system
- Replacement of 208 level crossings
- Tunnel projects, many already at the bidding stage
- Projects related to efficient operations and network management for improving logistics, including development of transport nagars (cities) and logistic hubs, enabling the seamless movement of traffic, improved public transportation, etc.
- Other opportunities (road safety, driver training institutes, etc.)
The Indian road infrastructure sector offers excellent opportunities for Wisconsin-based companies that are looking to invest in road construction projects, products, machinery and solutions.