Despite the challenges faced in 2025, the Indian construction industry has remained one of the world’s fastest growing. Growth is broad based and driven by sustained investment momentum and increasing demand in the construction sector, with output expected to exceed $1 trillion in nominal terms in 2027, according to GlobalData, a leading intelligence and productivity platform.

GlobalData’s latest report, “India Construction Market Size, Analysis by Sector, Competitive Landscape and Forecast to 2030,” reveals that the capital expenditure allocation in FY2026-27 is equivalent to 3.1% of the GDP and marks an increase of 11.5% compared to the expenditure of INR10.9 trillion ($121.6 billion) in the revised estimates for the FY2025-26 Budget. The continued focus on infrastructure and domestic manufacturing in the 2026-27 budget will provide a significant boost to the Indian construction industry.

Dhananjay Sharma, Construction Analyst at GlobalData, comments: “While all six construction sectors (commercial, industrial, institutional, residential, infrastructure and energy & utilities) are showing sustained growth momentum, growth in infrastructure, energy and utilities and industrial sector will help drive construction output. The government’s sustained focus on renewable energy, roads and railways and “Make in India” initiatives will boost the construction industry and have multiplier effect on the economy, helping it to achieve the mark of $5 trillion economy.”

GlobalData expects the construction industry in India to expand in real terms by 6.4% in 2026, supported by investments in transport infrastructure and energy projects, coupled with investments as part of FY2026-27 budget.

Sharma concludes: “The FY27 budget aims for steady economic growth in an uncertain global economy that has been affected by the recent tariff wars and further emphasises the government’s initiatives in the infrastructure sector. The government’s focus on improving the ease of doing business is also expected to enhance the business environment and attract local and foreign investors towards the construction industry.”