India Moves to Revive Private Investment in High-Speed Highway Projects
New revenue safeguards and risk guarantee fund aim to draw global capital into expressway expansion
NEW DELHI, Feb 16 : The Centre is preparing a revamped policy framework to reignite private investment in highways, nearly a decade after developers scaled back participation due to revenue uncertainty and regulatory bottlenecks.
According to officials familiar with the discussions, new guidelines expected to be finalised this month will offer stronger revenue protection mechanisms and open bidding to global infrastructure funds. The government aims to award projects worth ₹1 trillion ($11 billion) to private players by fiscal year 2027.
The administration of Prime Minister Narendra Modi is targeting a significant rise in corporate participation, with the goal of increasing the private sector’s share in road development to about 25% next year, up from current low single-digit levels. Over the past decade, muted investor appetite has forced the government to depend heavily on public expenditure to sustain infrastructure growth.
In the Union Budget this month, Finance Minister Nirmala Sitharaman announced a 9% increase in overall infrastructure spending to ₹12.2 trillion for the upcoming financial year. Allocations for roads and bridges will rise 6.9% to ₹3.1 trillion. She also proposed setting up an Infrastructure Risk Guarantee Fund to enhance investor confidence.
Historically, the highway sector drew strong participation under the Build-Operate-Transfer (BOT-Toll) model, allowing developers to recover investments through toll collection during concession periods. However, between April and November last year, only 1% of projects were awarded under BOT-Toll, with most contracts shifting to government-backed Hybrid Annuity and Engineering, Procurement and Construction formats.
Industry stakeholders have cited delayed clearances and competing parallel road projects as key deterrents to toll based models. The upcoming norms seek to address these concerns while enabling financial investors to bid independently and later onboard technical partners a structure more common in global markets.
The broader strategy also includes privatizing airports through bundled offerings and encouraging foreign collaboration in shipbuilding, reflecting a coordinated effort to increase corporate participation across infrastructure sectors.
India plans to expand its high speed road network fivefold over the next decade with an estimated outlay of ₹11 trillion. Analysts at Deloitte India estimate that reforms could unlock billions of dollars in fresh capital inflows over the next three years, helping reduce logistics costs and improve competitiveness.
