India Infrastructure Outlook 2025: CareEdge Growth Forecast

CareEdge Ratings’ latest sectoral outlook underscores infrastructure as a key pillar of India’s long-term growth, with a GDP multiplier of 2.5x.

Supported by flagship initiatives such as Gati Shakti and the National Infrastructure Pipeline (NIP), infrastructure investments are driving urbanization, sustainability, and the clean energy transition, despite geopolitical headwinds. In roads and highways, execution may face a 7–10 percent slowdown in FY26 due to delays in Hybrid Annuity Model (HAM) approvals, though toll traffic is forecast to grow at 7 percent.

Key Highlights

• Roads may slow in FY26, but toll traffic set to grow 7 percent
• Renewables to contribute 35 percent of power generation by FY30
• Data centers to attract Rs. 60,000 crore, doubling capacity by 2028

Monetization momentum continues, with a Rs. 2 lakh crore NH-HAM pipeline projected by FY28, despite challenges like traffic diversion and rail modal shifts. The airport sector is expected to grow at a 7 percent CAGR between FY25–FY27, slightly lower than previous estimates due to aircraft delivery delays and global travel disruptions. Still, India retains its position as the third-largest aviation market, making airports a long-term investment hotspot.

The power sector is undergoing a major clean energy transition, with solar and wind expected to generate 35 percent of total power by FY30. AT&C losses have fallen to 15–16 percent, while thermal PLFs have improved to 70 percent. Although renewables will dominate, thermal energy remains critical for stability, with 33 GW under construction.

Energy storage is emerging as a growth engine, with record-low tariffs in Battery Energy Storage Systems (BESS), backed by MNRE’s Viability Gap Funding for 43 GWh of capacity. Meanwhile, domestic solar manufacturing is scaling rapidly under PLI schemes and import barriers.

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Additionally, data centers are attracting an estimated Rs. 60,000 crore in investments between FY26–FY28, with capacity expected to double by 2028, positioning India as a leading digital hub in Asia.