Synopsis
2025-26 marked a pivotal moment in India’s transport landscape as highway development and new project allocations sank to levels unseen in seven years. The country saw less than 10,000 kilometers of highways constructed, with only 7,000 kilometers of new projects greenlit. This downturn is largely attributed to reinforced regulations on land use and necessary clearances.
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Highway construction and the awarding of new road projects in India fell to a seven-year low in 2025–26, reflecting a slowdown in project pipeline and tighter pre-bid conditions in the sector, reported TOI.
Official data show that less than 10,000 km of highways were constructed during the year, marking the lowest output since 2019–20. At the same time, only about 7,000 km of new projects were awarded in FY26, indicating a contraction in fresh contracts entering the system.
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The decline has been linked to stricter requirements around land availability and statutory clearances before projects are put up for bidding. Road agencies have also reduced the pace of converting state highways into National Highways, further limiting the volume of new projects.
Officials said agencies have adopted “self-restraint” to avoid awarding projects that could later face delays due to land acquisition challenges, forest and environmental approvals, or utility shifting issues. The approach, they noted, is aimed at preventing cost overruns and execution bottlenecks.
“Projects getting delayed serve no purpose; rather this results in cost escalation. A lot of efforts have been put into bringing down the number of delayed projects. Second, the focus now is on building more economic corridors and expressways rather than incremental expansion of existing highways,” an official said.
Despite the overall slowdown in project awards, the National Highways Authority of India (NHAI) reported that it constructed 5,313 km of National Highways during the year, surpassing its target of 4,640 km by around 15%.
Industry participants said the shrinking pipeline of new projects from NHAI and other agencies has intensified competition among contractors. In some cases, firms are reportedly bidding at rates up to 42% below initial estimates in order to secure limited available work.
A senior executive of a major highway developer said, “The impact of fewer projects being bid out will be visible in the next couple of years,” indicating that the slowdown in awards could have a lagged effect on execution and sector activity.
With agencies prioritising economic corridors and expressway projects over incremental expansions, the sector’s near-term trajectory appears to be shifting toward fewer but larger and more strategic infrastructure builds, even as overall construction momentum shows signs of moderation.
With inputs from TOI