With large residential and non- residential projects in the pipeline, the Indian infrastructure market is forecast to overtake Japan’s in next five years, says a report.
“India’s infrastructure market is the third-largest in Asia, and is forecast to overtake Japan’s in nominal value terms by 2023,” the report by BMI Research said. Although demonetisation had a negative impact on construction activity in 2016 as most construction workers’ wages were paid in cash, the Fitch group company said that it believes that “robust growth will return in 2017 as work resumes on the large pipeline of infrastructure, residential and non-residential projects in the country”.
“The Modi government has made some progress in addressing underlying issues in the sector, such as streamlining the land-acquisition process in some states, though the slow pace of reform means that the market remains relatively risky,” it said. The Narendra Modi-led government at the Centre has initiated several programmes aimed at improving logistics, stimulating investment in manufacturing and building affordable housing, which will contribute to growth in the construction industry over the next 10 years, the report added.
Reforms to foreign investment laws under Make In India initiative have made it easier for international companies to invest and participate in India’s infrastructure projects.