Before the lockdown, India saw a gradual slowdown in infrastructure investment mainly because of crippling issues like land acquisition and delays in environmental clearance. Irrespective, India continued to encourage PPP projects as well as the associated investments. The pandemic slowed down the infrastructure programme due to complete lockdown and decrease in demand as well as supply. The government had set up a National Infrastructure Pipeline (NIP) as a major pro-active initiative to invest about $1.5 trillion on infrastructure in the period up to FY 2025. NIP covers both economic and social infrastructure projects based on the updated Harmonised Master List of Infrastructure. NIP works through an interactive and dynamic online platform, the India Investment Grid that showcases the best investment opportunities in India to the global investor community. This grid provides a pan-India database for investment opportunities across sectors, track the progress of preferred projects and indicate interest, directly communicate with project promoters. In NIP, about 80 per cent of the investment would come from the central and the state governments. However, the pandemic has adversely affected all the plans including the NIP. In such a grim situation, the setting up of an infrastructure fund in India by a foreign investor is a big respite for the infrastructure sector. MIC Redwood 1 RSC Limited, which is the sovereign wealth fund for Abu Dhabi, United Arab Emirates has been given 100 per cent tax exemption by the Central Board of Direct Taxes for their investments in the infrastructure sector with the objective to give a boost to the infra investments in India.  Meanwhile, the Reserve Bank of India also provided debt moratoriums and working capital support through margin reduction and recalibration of working capital cycle. The infrastructure sector is struggling to manage the liquidity and the priority is to ensure sources of liquidity to cope with any operational, CAPEX and debt related payments. For investors in Indian infrastructure assets, though the long-term story remains intact, the valuation assessment in the short term should be calibrated to the short-term challenges. The recent move of 100 per cent tax exemption would definitely attract more investments in the sector and improve the inflow of money in the sector.  Recently, several notable transactions in roads, airports, telecom, electricity and solar have been awarded, which indicates that the Indian infrastructure sector is still attractive to investors not only in brownfield but also in high investment Greenfield projects. Infusion of funds from foreign investors implies the confidence in India’s infrastructure investments appetite and the fact that the foreign investors are betting on a stable Indian economy with a long-term strategy. To sustain the positive trend of investments in the infrastructure, the government is also opening up new sectors to private participation, like the railways (mainly railway stations and passenger trains), health and education. The government is also pushing for more PPP models for resource augmentation and efficiency improvements in infrastructure. However, even though certain exemptions are being offered, the government is keeping a strict vigil on the international best practices and quality control for such projects so that there is no dilution in quality or standards. Coupled with the amendments in the labour laws and improvement in the ease of doing business ranking, India is poised to see significant investments in projects on Ministry of Housing & Urban Affairs, National Highway Authority of India, Railways, state PWDs, energy, transport and water & sanitation. Foreign investments are crucial for the overhauling projects in infrastructure sector and the global struggle to move supply lines from China, a large captive market and massive pent up demand due to Covid-19 restrictions will definitely drive investments in ports, airports, highways, townships, construction development projects and energy resuming a strong trajectory of growth once the COVID effect subsides.   Author: Neeraj Dubey, Partner, Singh & Associates