West Asia conflict clouds outlook, but infra investments seen rising 45–50% through FY27–28: Crisil

요약

India's infrastructure investment is set for strong growth of 45-50% over the next two years. This surge is fueled by robust domestic demand and supportive government policies. Sectors like renewable energy and data centers will lead the expansion. While the …

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World Bank ranks India among top 5 in terms of private investment in infra

The ongoing West Asia conflict could add inflationary pressure to India’s infrastructure sector, but investment is still expected to grow 45–50% over the current and next fiscals, supported by strong domestic demand and policy backing, according to Crisil Ratings.

Investments across key sectors—including renewables, roads, real estate and emerging segments—are projected to rise to Rs 23–24 lakh crore, broadly in line with growth seen in the past two years. While largely insulated from direct geopolitical impact, these sectors may face indirect cost pressures if the conflict persists.

Also Read: Infra spend up six-fold since 2014, crosses Rs 12 lakh crore: PM Modi

Renewable energy is expected to lead the growth, with annual capacity additions of 50–55 GW, backed by a strong pipeline and policy push. Data centre capacity is also set to expand 35–40% annually through FY28, driven by rising artificial intelligence and cloud adoption.

The road sector is likely to see a gradual recovery in project awarding, aided by improved budgetary support and faster approvals, while asset monetisation is expected to gain traction.
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In real estate, residential demand is expected to remain steady at high levels, while commercial office demand may grow 6–7%, supported by flexible workspaces, BFSI and global capability centres.

However, challenges remain, including delays in renewable offtake, transmission gaps, slowdown in road awards and rising housing inventory, along with potential moderation in office demand due to global trends and AI-led disruption in the IT sector.

“While largely insulated from direct impact, these sectors may face indirect inflationary pressures if the conflict prolongs. Nevertheless, investment growth is likely to remain strong,” said Krishnan Sitaraman, Chief Ratings Officer at Crisil Ratings.

Also Read: India needs $2.4 trillion urban infra investment by 2050: World Bank

Crisil added that healthy balance sheets, stable cash flows and prudent leverage will support infrastructure players, even as newer sectors like green hydrogen and battery manufacturing may require continued policy support.
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