India’s road construction pace is expected to slow to around 21 km per day in FY27 from 25 km per day in FY26, as lower highway awards and execution challenges weigh on activity, according to CareEdge Ratings. The pace would amount to approximately 7,750 km during the year, compared with a peak of 36.8 km per day recorded in FY21.

CareEdge Ratings said the roads sector had entered an execution-intensive phase after a decade of significant expansion in the national road network and rising investment. The focus is shifting from rapidly creating new assets to executing and completing projects already in the pipeline.

National highway awarding activity has declined from a peak of 12,731 km in FY22 to an estimated 7,000 km in FY26. The ratings agency said lower awards during FY25-FY26, along with continuing execution challenges, were likely to affect construction activity in FY27.

State governments are expected to become the key drivers of road-sector capital expenditure, with state road capex likely to outpace central capex in FY27. The shift is being supported by a stronger focus on regional and intra-state connectivity as national highway awards moderate and the sector concentrates on completing its existing project pipeline.

India’s overall road network expanded from about 5.23 mn km in FY16 to 6.37 mn km in FY26. Annual government and private road capex rose from Rs. 0.94 tn to Rs. 2.62 tn over the same period. CareEdge Senior Director Rajashree Murkute said the sector was moving towards execution quality, operationalisation and asset monetisation. She added that FY27 awarding activity could benefit from the revised build-operate-transfer toll framework and a stronger pipeline, although lower award inflows could restrain construction. A growing pool of operational annuity- and toll-backed assets is improving cash-flow visibility and supporting monetisation opportunities, though softer valuations and limited mature toll assets may moderate activity.