Prospects bright for Indian construction industry
India’s construction industry will continue to grow into the next decade, a report from market research firm Timetric predicts.
According the company’s latest report on the Indian building market, the sector will grow at a CAGR of 4.16% from now until 2021. This is an increase over market growth seen in the previous report period, 2012-2016, where the Indian construction industry expanded by 3.95%.
India is one of the world’s most vibrant markets for building and interiors at the moment. Huge sums are being poured into a comprehensive range of construction projects, from major infrastructure upgrades, sweeping residential housing programmes and wholesale city building.
Residential construction is definitely a market to watch in India right now. India is facing a huge housing backlog - some estimates claim as many as 30 million families need homes To try and tackle the ever-expanding need for affordable housing, the government is planning on building 20 million low cost units by 2022.
Elsewhere, the spotlight falls on infrastructure with a whopping $349.9 billion allocated to essential upgrades in the 2017 budget - not least in transportation. Rapid urbanisation is necessitating the construction of modern, convenient transport links to and from major population centres.
This means India is funelling cash into areas such as road building. This sub-sector alone is expected to see $13 billion of investment over the coming years. As much as 7,000 km of new roads are planned for construction, linking the East and West of India.
In 2015, the government launched the Smart City Mission and the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) scheme. Under the Smart City Mission, the government plans to develop the infrastructure of 100 selected cities with an investment $7.2 billion, whereas under the AMRUT scheme it plans to spend $7.4 billion to develop 500 cities by 2022.
In short, it’s a good time to get into construction in India. It’s been on the international radar for some time now, with many foreign companies making some big wins on the market. Malaysian and Indian companies inked deals worth $36 billion in early April 2017, for example, with Malaysian firms looking to get a slice of India’s quickly growing infrastructure pie.
Outside of the construction sector, India’s building activity is providing some different entry routes. Transport and logistics operators are also getting in on the action. “There is heavy demand for construction equipment. Sectors such as roads, airports, power, and seaports have become very attractive for both domestic and foreign investors,” said Captain Sandeep Anand, CEO of projects and engineering solutions at third-party logistics provider Allcargo.
With many points of entry, India’s construction industry offers a wealth of opportunities for international companies over the next decade.
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