India Plans Policy Push to Attract Private Investment in Expressway Projects

The Indian government is intensifying efforts to revive private investment in high-speed highways and expressway construction, seeking to reduce reliance on public funding and accelerate the country’s infrastructure expansion. After a decade of muted private participation, authorities are preparing a revamped policy framework designed to make road projects more financially viable and attractive to global investors.

Officials familiar with the deliberations said the government plans to finalise new rules this month that would offer revenue protection for developers and allow global investment funds to bid directly for projects. The initiative aims to enable private players to play a much larger role in highway development, with a target of awarding around ₹1 trillion ($11 billion) worth of projects to the private sector by the end of the fiscal year 2026–27.

Private capital has largely shunned India’s highways space over the past decade, largely due to revenue risk concerns, bureaucratic delays and low returns under traditional models such as Build-Operate-Transfer (BOT). In recent years, government-backed models like the Hybrid Annuity Model (HAM) and Engineering, Procurement and Construction (EPC) contracts have dominated new awards, accounting for roughly 99% of the total 26,425 kilometres of roads assigned.

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Under the proposed framework, these dynamics are set to change. By addressing industry grievances around approval delays and competitive pressures from parallel infrastructure, policymakers hope to restore confidence. Allowing financial investors to bid directly — and then bring in technical partners for execution — aligns with international best practices and is expected to unlock fresh capital flows into long-term road assets.

The government’s broader infrastructure push is also reflected in its latest budget, where total infrastructure spending was increased to ₹12.2 trillion, with road and bridge allocations rising nearly 7% to ₹3.1 trillion. To further boost investor confidence, an Infrastructure Risk Guarantee Fund was proposed to underwrite certain project risks, according to Budget statements by Finance Minister Nirmala Sitharaman.

The revived effort to draw private capital is part of a larger strategy to modernise India’s transportation network, reduce logistics costs, and strengthen competitiveness amid global pressures, particularly from neighbouring infrastructure superpowers. If successful, the reforms could mark a significant shift in how India finances and builds its high-speed roadways in the coming decade.

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