The construction industry in India is the second largest employer and contributes more than 10% of India’s GDP. 50% of the demand for construction activity in India is for infrastructure, and the rest comes from industrial activities, residential and commercial development etc. The Indian construction industry is valued at over USD 126 Billion (117 Billion Euro).
The rapid growth of Indian cities opens huge opportunities for the construction industry. India has the second largest urban population in the world, and it contributes significantly to India’s GDP (accounting for 62 – 63% in 2009-10 and project to reach 70 – 75% by 2030). Between the census of 2001 and 2011 91 million people moved into India’s urban centers –a growth of around 32%. Recent estimates suggest that by 2030 nearly 590 Million people will live in Indian cities. While the population keeps swelling, the infrastructure is struggling to even meet the demands of the existing urban population. There is need for re-generation of urban areas in existing cities and the creation of new, inclusive Smart Cities to meet the demands of increasing population and migration from rural to urban areas. Future cities of India will require smart real estate and urban infrastructure. Over the next 20 years investments of USD 650 Billion are estimated in urban infrastructure.
In recent years private, investments stagnated due to the weak economic activity, sustained high interest rates and chronic problems in obtaining long-term loans and governmental approvals. The new government has started a number of initiatives to try to deal with the issues facing cities – among other things setting up Infrastructure Investment Trusts and lowering requirements for banks that finance infrastructure projects in order to solve these credit crunches. Efforts to speed up and digitize approval processes are also showing results. Also highly controversial easing of environmental regulations has been initiated and will be continued – although this is a major political issue