Cube Highways Trust

Overview of infrastructure sector in India

Developing and modernising the infrastructure sector has been a priority area for the Government of India and has witnessed increasing public investments and budgetary support. Further, the government has undertaken several reforms and initiatives in the infrastructure sector, which has resulted in robust secular growth in most of the segments within the sector.

Infrastructure development remains a key focus area of the government’s growth strategy, with a significant portion of capital expenditure directed towards transportation and logistics infrastructure. The budget reinforces the emphasis on improving multimodal connectivity, reducing logistics costs and supporting India’s long-term manufacturing and trade ambitions through sustained investments in roads, railways, ports and inland waterways.

Infrastructure capex for Financial Year 2027(BE) has been budgeted approximately 17% higher than Financial Year 2026RE, with the incremental outlay concentrated in logistics, power, and affordable housing. With logistics costs estimated at approximately 8% of GDP by DPIIT, reducing this burden is central to the budget’s transport focus, and accordingly 53% of total infrastructure capex has been directed toward roads, railways, waterways, and aviation, sectors also critical to achieving the government’s target of raising manufacturing’s share in GDP to 25% by 2035 from the current 16-17%.

The roads sector continues to receive strong policy support, with increased allocations towards highway development and expansion. Higher budgetary support for the National Highways Authority of India (NHAI) and road infrastructure programmes is expected to sustain project execution and capacity augmentation.

The overall railway allocation is up 10.5% over Financial Year 2026 RE, with new line developments, doubling, and gauge conversion allocations rising 20%, 30%, and 7% respectively, while NIF capital has grown 216%. A new DFC connecting Dankuni in the east and Surat in the west has been proposed to bridge the existing eastern and western freight corridors, improve bulk commodity movement of coal and finished steel, and reduce mixed-traffic congestion as DFC commissioning progresses. Seven new HSR corridors have been proposed to cut intercity travel times, with Mumbai-Ahmedabad currently under construction and the remaining, Mumbai-Pune, Pune-Hyderabad, Hyderabad-Bangalore, Hyderabad-Chennai, ChennaiBangalore, Delhi-Varanasi, and Varanasi-Siliguri are at planning stage.

India’s existing 111 national waterways are to be supplemented by 20 new ones, with NW-5 receiving priority, connecting mineral-rich districts like Talcher and Angul and industrial hubs like Kalinga Nagar to deep-water ports at Paradip and Dhamra to improve critical minerals logistics. A Coastal Cargo Promotion Scheme has been announced targeting an increase in the modal share of inland waterways and coastal shipping from 6% to 12% by 2047, significant given these modes offer substantially lower costs for bulk cargo relative to road transport. Complementing this, ship-repair hubs are planned at Varanasi and Patna to strengthen the country’s maritime ecosystem in line with India’s 2047 maritime ambitions, while a viability gap funding scheme for indigenous seaplane manufacturing has been introduced to improve waterway-linked tourism and remote area connectivity.