India’s road network: PAVING the WAY for PROGRESS

India stands on the brink of a transformative era in infrastructure, driven by Prime Minister Narendra Modi's ambitious vision of elevating the nation to a $35-trillion economy and achieving 'Developed Nation' status by 2047. This grand plan, spanning the next 25 years, promises to fundamentally reshape India’s infrastructure landscape, setting the stage for unprecedented economic growth and development. Central to this transformation is the PM Gati Shakti – National Master Plan (PMGS-NMP), launched in October 2021, for providing multimodal connectivity infrastructure to various economic zones. Gati Shakti seeks to enhance India’s global manufacturing and trade competitiveness, strengthen its position in international supply chains, and support the $2 trillion export target by 2030. Further, to improve logistics efficiency, the government introduced National Logistics Policy in September 2022, with an aim to reduce logistics costs from its estimated 14% of the GDP to around 8% by 2030. These initiatives are playing a crucial role in advancing the country’s infrastructure and driving sustained economic growth.

Building on this comprehensive framework, the government has underscored its commitment to infrastructure development through a substantial increase in capital investment. Total capital expenditure has surged to Rs 11.1 lakh crore ($133.73 billion) in Union Budget 2024-25, representing approximately 3.5% of GDP. Additionally, Rs 1.5 lakh crore ($18 billion) has been allocated in long-term, interest-free loans to states to enhance resource allocation and support regional infrastructure projects. This robust financial backing is channeled through the National Infrastructure Pipeline, introduced in 2019, which targets an investment of over $1.5 trillion in infrastructure development by 2025.

The Ministry of Road Transport and Highways (MoRT&H) is driving its transformative vision and this capital investment through the Bharatmala Pariyojana, an umbrella program launched in 2017, to revolutionize India's highway network with an overarching corridor-approach, to optimize the efficiency of already built infrastructure, enable multi-modal integration, bridge infrastructural gaps for a more seamless freight and passenger movement across the country, and integrate National and Economic Corridors. The government is also focusing on enhancing last-mile connectivity through targeted schemes like the Pradhan Mantri Gram Sadak Yojana (PMGSY) 3.0 and Parvatmala Pariyojana. PMSGY aims to improve rural access by constructing five industrial corridors and upgrading 1,25,000 kilometres of rural roads, boosting connectivity to essential facilities like markets, schools, and hospitals. The Parvatmala Pariyojana seeks to address transportation challenges in difficult terrains by developing ropeway infrastructure, ensuring safe and efficient access in areas where traditional methods fall short.

This emphasis on connectivity will continue to evolve under the government’s ambitious 2025, including a major expansion of the National Highway Network by 2,00,000 kilometres, and development of 22 new Greenfield Expressways, 23 critical infrastructure projects, and establishment of 15 of the planned 35 Multi-Modal Logistics Parks (MMLPs). These measures are designed to enhance multi-modal connectivity across the nation, driving improved transportation efficiency and regional integration.

Complementing these large-scale infrastructure projects, the National Highways Authority of India (NHAI) is also focused on enhancing the commuter experience through establishment of Wayside Amenities (WSA) at over 600 strategic locations. Positioned every 40-60 km along both existing and new National Highways and Expressways, these amenities will provide travellers with improved services, ensuring a more comfortable and efficient journey as the network continues to expand.

Aligned with the Sustainable Development Goals 2030, the government's infrastructure development strategy places a strong emphasis on road safety. This approach involves designing and constructing roads with advanced technologies to minimize hazards and reduce accident risks. MoRT&H is committed to achieving a vision of zero accidents through the implementation of Advanced Traffic Management Systems and has set an ambitious target to cut road accidents and fatalities by 50% by 2025. This goal reflects a broader commitment to enhancing safety through improved infrastructure and increased public awareness. At the same time, the focus on sustainability in road transport is intensifying. Given that transport contributes 14% of India's carbon emissions, transitioning to greener alternatives is crucial for meeting Net Zero targets. The government is investing approximately $48 billion in 27 Greenfield Expressways totalling 10,000 kilometres. These new corridors are projected to reduce travel distances by 14%, lower transportation costs by 2.5%, and save 110 crore litres of fuel annually, while decreasing CO2 emissions by 250 crore kilograms each year. Complementary efforts to promote electric vehicles (EVs) and expand public transport infrastructure will further advance these environmental objectives.

These large-scale road infrastructure initiatives often require substantial investment and have lengthy development periods, straining government resources. To manage these financial complexities effectively, the government has adopted several innovative funding models. A key strategy involves leveraging Public-Private Partnerships (PPPs), which tap into private sector investment and expertise. Additionally, the promotion of 100% Foreign Direct Investment (FDI) in the road sector aims to attract international capital and strengthen the financial base for these critical projects. The National Monetization Pipeline (NMP), introduced in the Union Budget 2021-22, is a significant initiative in this regard. The NMP focuses on monetizing public infrastructure assets, with roads comprising 27% of the approximately $80 billion asset pipeline. By providing a structured roadmap for asset availability, this initiative aims to attract private investment and optimize asset utilization. Supporting this approach is the Toll, Operate, and Transfer (TOT) Model, which offers 30-year tolling rights on operational roads. With 75 projects already identified and bidding for new bundles underway, this model helps generate essential funds for ongoing development. Additionally, the National Highways Infra Trust (InvIT), launched in 2022, facilitates the transfer of toll road assets to a trust that raises capital through investor contributions. The success of InvIT Round-3, which raised $1.9 billion by attracting retail investors through a low minimum investment threshold, has greatly strengthened funding for infrastructure projects.

In conclusion, India's rapid strides in road infrastructure development are a testament to its commitment to progress and connectivity. The ambitious road construction programs, coupled with innovative technologies and efficient management, have not only transformed the country's transportation landscape but have also catalysed economic growth and social development. As India continues to invest in its road network, the future looks promising, with the potential to further enhance connectivity, improve accessibility, and drive sustainable development across the nation.

Kritika Singh Assistant Vice President, Invest India

Rhea Nakwal Junior Investment Specialist, Invest India