India’s road infrastructure sector is witnessing a noticeable slowdown, with construction activity expected to touch its lowest pace in nearly a decade by FY2027. After years of aggressive highway expansion, the momentum has tapered due to reduced project awards, execution bottlenecks and funding constraints.
Construction is projected to decline to nearly 25 kilometres per day, marking a sharp contrast to the rapid build-out phase seen between FY2019 and FY2024. A major reason behind this moderation is the slowdown in fresh project announcements by the National Highways Authority of India and the Ministry of Road Transport and Highways. Delays in land acquisition, regulatory clearances and weather-related disruptions have further weighed on execution timelines.
However, while new construction activity faces headwinds, operational toll road assets continue to demonstrate resilience. Toll collections remain stable, supported by steady traffic growth and periodic toll rate revisions. This has sustained investor confidence, particularly in infrastructure investment trusts (InvITs), which rely on predictable cash flows from mature road assets.
The limited pipeline of new projects has intensified competition among developers, leading to aggressive bidding and margin pressure. Mid-sized engineering and construction firms may feel the strain more acutely as order inflows moderate.
Looking ahead, sector recovery will depend on renewed project awards, smoother approval processes and stronger private sector participation. If these structural issues are addressed, India’s road sector could regain its growth trajectory in the coming years, balancing fresh construction with sustainable asset monetisation.
