Private investors are expected to commit close to ₹1 trillion towards highway construction in FY27, potentially marking the largest annual private sector investment in India’s roads sector, according to two people aware of the matter.
Projects worth around ₹35,000 crore, reserved exclusively for private participation under the build-operate-transfer (toll) model, are likely to be bid out in the first three months of the next fiscal year, according to the first person cited above.
Detailed project reports for projects worth ₹50,000–60,000 crore are being finalised and are expected to be opened for bidding in the third and fourth quarters of FY27.
“As all these would be BOT (toll) projects, the private sector is expected to give investment commitments of close to ₹1 trillion for building greenfield highways,” the person said.
The move signals a renewed push to crowd in private capital after years of limited activity under build-operate-transfer (BOT) model. Under the framework, developers finance, build and operate highway projects during a concession period of 20–30 years, recouping investments through toll collections.
Unlike the hybrid annuity model (HAM), BOT (toll) requires significantly higher upfront equity and exposes developers to traffic and revenue risk.
Most of the upcoming awards are expected to comprise six-lane, access-controlled corridors, underscoring the government’s focus on high-capacity highways aimed at improving logistics efficiency and cutting travel time.
The proposed ₹1 trillion commitment would represent a sharp scale-up in private participation, even as overall project awarding moderated in recent years, said the second person quoted earlier.
Mint had reported on 19 January that the government planned to bid out ₹75,000 crore worth of highways under the BOT (toll) route in FY27. Officials in the road transport and highways sector said, on condition of anonymity, that the target has been scaled up, as overall highway awards are expected to rise next year. The total value of projects to be awarded in FY27 could touch ₹3–4 trillion, they said.
According to the road transport and highways ministry, highway awards stood at 1,951 km through November in FY26. The ministry expects total awards to exceed 7,500 km by year-end, broadly in line with the previous fiscal year. Depending on lanes and access control measures, this could translate into projects worth roughly ₹1.5–2 trillion.
None of the projects awarded so far this year has been under the BOT (Toll) route. In FY27, total highway awards are projected to cross 10,000 km, with a significant share expected under BOT.
Queries emailed to the ministry on Friday remained unanswered till press time.
Back in focus
Kuljit Singh, partner and national infrastructure leader at EY India, said the government has introduced several investor-friendly measures in the revised model concession agreement for BOT (Toll) projects. “However, BOT projects require a large amount of equity from developers—almost double of what is needed for HAM projects—and are exposed to significant toll and traffic risk, given the number of new highways being planned,” he said.
To ensure strong bidding interest, Singh suggested that the government consider removing the cap on grant support sought as part of bids. “This will ensure that projects considered high risk by developers are also successfully bid out, albeit at a higher grant amount,” he said.
Anurag Gupta, partner at Deloitte India, said investor interest remains vibrant but flagged construction readiness, optimal risk sharing and robust dispute resolution as critical success factors. “With procurement likely to be split across EPC, HAM and a rising share of BOT, and reforms aimed at sharing risks and rewards more equitably, we expect the development pathway to accelerate,” he said.
A spokesperson for IRB Infrastructure Developers Ltd, expected to be among the key bidders, said improving macroeconomic fundamentals and a stable policy framework have renewed interest in viable BOT (Toll) assets.
With FASTag penetration exceeding 95%, revenue visibility has strengthened, creating attractive risk-adjusted return opportunities for developers and long-term investors, the spokesperson added.
The resurgence marks a turnaround for a model that once dominated highway development. Between 2007 and 2014, BOT projects accounted for the bulk of road awards, touching 96% of all projects in 2011-12.
However, aggressive bidding, stalled land acquisition and financing stress eroded investor appetite. No projects were awarded under the model in 2018-19 and 2019-20, and awards remained sporadic thereafter. In FY24 and FY25, the National Highways Authority of India did not award any projects under BOT route.
If the expanded FY27 pipeline materialises, it could signal a decisive shift back to private-led highway development, anchored in recalibrated risk allocation and a deeper capital market appetite for long-term infrastructure assets.
MoRTH has been provided a record budgetary capex allocation of ₹2.94 trillion (budget estimates) for FY27, up from ₹2.72 trillion (revised estimates) in FY26. The government aims to channel a larger share of budgetary resources toward maintenance and safety upgrades of existing highways, while relying more heavily on private capital for greenfield construction.
Officials said greater private participation would allow part of the budgetary allocation to be used to pare debt at the National Highways Authority of India, which was at ₹2.16 trillion as on 31 January 2026.
- India may see a record ₹1 trillion private capital commitment to highways in FY27.
- Highway awards in FY27 could touch ₹3–4 trillion, with a rising share expected under BOT after years of EPC and HAM dominance.
- Developers face higher equity exposure and traffic risk under BOT, experts said.
- A successful FY27 pipeline would mark the strongest comeback yet for private-led highway development after muted BOT activity.
- Greater private participation would allow part of the budgetary allocation to be used to pare debt.