Key Points

The global players are increasingly deploying their capital and establishing Indian arms to cater to the needs of the infrastructure and construction sector.

"India is a market on today's date that cannot be ignored globally because, in a construction aspect, India is the third largest global construction market. So that is something huge," said Nirmalya Chatterjee, India head of Nemetschek, a Germany-based company.

"Hopefully, in the next two years' time, we will be the third largest economy in the world too. So this is a scale of India as a market. Quite obviously, it has a huge, huge potential," said Chatterjee.

India has embarked on an ambitious journey to revolutionise the country's infrastructure landscape, aiming to bolster economic growth, enhance connectivity, and improve the quality of life for its citizens.

With a focus on modernising transportation networks, upgrading urban amenities, and expanding digital infrastructure, the government has launched several transformative initiatives, with Capex Expenditure of Rs 11.21 lakh crore (3.1 per cent of GDP) earmarked in the financial year 2025-26.

He further added that construction is the second-largest sector GDP contributor after agriculture, and that makes it a centre of attraction for global companies.

"So construction is a huge kind of potential. Technology companies, engineering companies, overseas companies - all are looking into this market and how they can be a part of this growth journey. And this momentum is going to continue in the coming day"s," he added.

The total infrastructure investment in India has significantly increased, with public and private sector contributions shaping the growth trajectory.

India's total infrastructure spending has grown exponentially, with budget allocations rising to Rs 10 lakh crore in 2023-24, as per the official figures.

However, the fragmented nature of the construction markets is causing a challenge, despite huge potential.

Another major challenge for global companies is the fear of escalating expenses tied to new technology; however, Chatterjee says that the conditions are improving.As the states and educational institutions are ramping up the infrastructure projects, the German compay official said that they have been able to secure projects from various states such as Maharashtra, Andhra Pradesh, Tamilnadu, IITs and other universities, demonstrating the wider adoption of global technology.

As per the credit rating agency ICRA Indian construction industry is expected to report a year-on-year growth of 8-10 per cent in operating income (OI) for the FY 2026, supported by an adequate order book position, on the low base of FY2025.

ICRA estimates the aggregate order book/OI for its sample set of entities1 at 3.5 times as of March 31, 2025, reflecting healthy growth prospects and revenue visibility. It forecasts the operating margin of the players to be steady at 10.5-11.0 per cent for FY2025 and FY2026.

- ANI