Roads and Highways Market in India – Size, Forecast, and Competitive Landscape: Explore Capital Infra Trust’s Potential

Market Outlook: Roads and Highways Market in India 2025-2029

The roads and highways market in India is experiencing significant growth, driven by increasing government investments in road infrastructure development, the expansion of national highway expansion, and the ambitious Bharatmala project updates, which aim to enhance connectivity across the country. As demand for better transportation rises, there is a growing focus on highway construction projects, road building equipment, and highway maintenance solutions to support the development. The government's emphasis on public-private partnerships roads is further accelerating progress, while the implementation of toll collection systems and expressway development plans are streamlining traffic flow. Additionally, the integration of road safety technologies is playing a critical role in improving road conditions and ensuring safer travel for all.

The market is expected to grow by USD 80-120 billion at a CAGR of 7%-11% between 2025 and 2029. Exact values for this market can be accessed upon purchasing the report. Key companies in this market include:

• National Highways Infra Trust
• Cube Highways Trust
• IndiGrid Infrastructure Trust
• Shrem InvIT
• Others

IPO Company Overview: Capital Infra Trust in the Indian roads and highways market

Capital Infra Trust recently launched its IPO on the BSE and NSE in January 2025, creating a new opportunity for investors. Capital Infra Trust is a prominent Infrastructure Investment Trust (InvIT) in India, focused on investing in high-quality road and highway infrastructure assets across the country. With a strategic portfolio aimed at providing stable and long-term returns to investors, Capital Infra Trust plays a pivotal role in improving India's road connectivity and infrastructure development. By focusing on well-established road projects with predictable cash flows, the trust offers investors exposure to the rapidly growing infrastructure sector in India, while contributing to the country’s national development goals.

Market Segmentation: How is the Indian roads and highways market segmented?

By Road Infrastructure:

• National Highways
• State Highways
• Urban Roads
• Expressways
• Rural Roads

The national highways subsegment is the leading category, as these roads are the backbone of India’s road network, facilitating long-distance transportation across states and crucial for economic growth. National Highways receive significant government investments for maintenance, upgrades, and expansion, given their importance to the country’s logistics and connectivity.

By Project Funding Model:

• Public-Private Partnerships (PPP)
• Government-funded Projects
• Toll-based Projects

The public-private partnership (PPP) subsegment is the leading funding model, as it enables the involvement of private players in financing, designing, and maintaining road projects, thereby easing the financial burden on the government while ensuring efficiency in execution. This model has gained traction for developing and upgrading highways, given its cost-sharing structure and focus on timely project delivery.

Investment Opportunities: Why explore the Indian roads and highways market with Technavio?

Recent developments in the roads and highways market in India reflect significant progress in infrastructure expansion, with a strong focus on improving connectivity and road quality across the country. The government has been actively increasing investments in the sector under various programs such as the Bharatmala Pariyojana, which aims to expand national highways and improve logistics efficiency. Additionally, the Indian government is emphasizing the development of expressways, rural roads, and urban roads to enhance accessibility and reduce congestion in major cities. The push towards digitalization in road toll collection systems and increased use of technology for road monitoring and maintenance has also led to more efficient operations, further accelerating the market's growth.

Another major trend in the Indian roads and highways market is the rise of public-private partnerships (PPP) in road projects. The model has gained significant traction as it allows the government to share the financial burden with private entities while ensuring the efficient execution and maintenance of infrastructure. These partnerships have led to an increased number of highway projects being awarded, with private companies taking on the responsibility for construction, operation, and maintenance, reducing the time for project completion. The market has also seen growth in expressway development, with a significant push towards building world-class road networks, especially along high-traffic corridors and key industrial zones. With continued government support and private sector involvement, the roads and highways market in India is poised for long-term growth.

The roads and highways market in India is witnessing robust growth, fueled by an ambitious road network expansion initiative that aims to enhance connectivity and reduce congestion. Key to this growth are economic corridors, which are being developed to promote industrial growth and streamline transportation across regions. Road project tenders are increasing in response to the rising demand for better infrastructure, with private and public sectors coming together under the Hybrid Annuity Model to ensure efficient project execution. The adoption of construction equipment has become essential for accelerating highway development, while innovations like green highways are gaining traction to promote environmental sustainability. Alongside, traffic management technologies are being integrated to optimize traffic flow, ensuring that the expanded road networks can support the growing volume of vehicles without compromising safety and efficiency.

Market Dynamics: What factors are influencing the roads and highways market in India?

Drivers:

The roads and highways market in India is primarily driven by the country’s rapid urbanization, economic growth, and increasing demand for improved connectivity. The government’s focus on infrastructure development, particularly through initiatives like the Bharatmala Pariyojana and National Highways Development Project (NHDP), is fueling investments in road construction and upgrades. Additionally, the rise in freight and passenger traffic, along with a growing emphasis on logistics efficiency, is accelerating the demand for better roads and highways, particularly in key industrial and urban areas.

Trends:

A key trend in the Indian roads and highways market is the growing adoption of Public-Private Partnerships (PPP), which allows the private sector to collaborate with the government in financing, constructing, and maintaining road projects. Another trend is the focus on smart infrastructure and digitalization, such as the implementation of electronic toll collection systems, real-time monitoring, and AI-driven maintenance solutions. Moreover, there is an increasing emphasis on sustainable road development, incorporating eco-friendly materials and technologies to reduce the environmental impact of road construction and maintenance.

Opportunities:

The Indian roads and highways market offers significant opportunities, particularly in rural and urban road development. The push for improved last-mile connectivity and expansion of road networks to remote areas presents opportunities for private players and contractors. Additionally, the development of expressways and industrial corridors, which are key to reducing travel time and boosting economic activity, creates substantial growth potential. The rise of electric vehicles (EVs) also presents new opportunities for infrastructure projects, such as building EV charging stations along highways.

Challenges:

Despite the growth potential, the roads and highways market in India faces several challenges, including land acquisition issues and delays in project approvals, which often lead to time and cost overruns. Additionally, the sector is grappling with funding constraints, especially for large-scale infrastructure projects, requiring innovative financing models like PPP. Poor road maintenance, traffic congestion in urban areas, and environmental concerns also pose significant challenges to ensuring the long-term sustainability and efficiency of the road network in India.

Investment Questions: Topics to consider when investing in the roads and highways market in India

What is the current regulatory environment for road infrastructure projects in India?
How do government policies, such as the Bharatmala Pariyojana or the National Highways Development Project, impact road construction and maintenance? Are there any new regulations or upcoming policy changes that could affect market dynamics?

What are the potential risks related to land acquisition and project approvals?
How likely are delays in securing land or obtaining the necessary permissions for road projects? How can investors mitigate these risks when evaluating potential projects?

How will the growth in urbanization and industrialization influence the demand for roads and highways?
What are the projected trends in urban growth, freight movement, and passenger traffic in specific regions of India, and how will these trends impact the demand for new roads, highways, and upgrades?

How are technological advancements, such as smart toll systems or electric vehicle charging stations, influencing the sector?
How important is the adoption of technology in improving road efficiency and reducing operational costs? Will future infrastructure need to accommodate emerging technologies, and how will this affect investment opportunities?

What role does sustainability play in road development and how is it impacting investments?
What is the market demand for environmentally sustainable road construction, such as the use of green materials or eco-friendly technologies? How do environmental regulations and climate considerations affect the feasibility of projects?

For a detailed analysis of the roads and highways market in India, buy the full report

Technavio Report Insights: How Can Technavio Reports Help Investors Make Better Business Decisions?

Key Features of a Technavio Report: 

• Comprehensive Market Analysis: Provides a detailed overview of the roads and highways market in India, including market size, growth rate, segmentation, and regional analysis. 

• In-Depth Competitive Landscape: Offers insights into the competitive dynamics, market share and positioning, and product offerings of key players. 

• Future Market Trends: Identifies emerging trends and opportunities that can shape the future of the market. 

• Detailed Segmentation: Breaks down the market into various segments to help investors identify specific niches and target markets. 

• Expert Analysis: Provides expert insights and forecasts from industry analysts

FAQ

1. What are the key drivers of the roads and highways market in India?
Key drivers include rapid urbanization, growing traffic congestion, economic development, and rising demand for better connectivity. Additionally, government initiatives like the Bharatmala Pariyojana and National Highways Development Project (NHDP), which focus on road expansion and modernization, are pushing the market forward. The increase in freight and passenger traffic and the need for efficient transportation are also significant contributors.

2. What are the challenges facing the roads and highways market in India?
The market faces several challenges, including land acquisition issues, which can cause project delays, funding constraints, and bureaucratic red tape. Environmental concerns and the need for sustainable development also pose challenges. Additionally, the rapid pace of urbanization has led to increasing congestion and demand for improved infrastructure, requiring effective long-term planning and investment.

3. How is the government supporting the roads and highways market in India?
The government is providing significant support through various initiatives like the Bharatmala Pariyojana to improve national highway networks, Pradhan Mantri Gram Sadak Yojana (PMGSY) for rural connectivity, and National Infrastructure Pipeline for comprehensive infrastructure development. The government is also encouraging investments through the PPP model, offering favorable policies and incentives to attract private players into road development projects.

4. How does the growth of electric vehicles (EVs) impact the roads and highways market?
The growth of electric vehicles (EVs) in India is creating new infrastructure requirements, including the establishment of EV charging stations along highways and the integration of green technologies in road development. The government’s focus on promoting EV adoption presents an opportunity to integrate sustainable and future-proof solutions in road infrastructure projects.

5. What is the outlook for the roads and highways market in India?
The outlook for the roads and highways market in India is highly positive, with continued growth expected due to urbanization, industrialization, and a government-led push for infrastructure development. The market is set to benefit from ongoing projects, increasing investments, and rising demand for improved connectivity. Furthermore, technological advancements and private sector involvement will further fuel the market’s growth over the next decade.