Highway Construction Pace Seen Slowing to 27 Km a Day in FY26

01 Sep 2025 CW Team

India’s national highway construction is set to moderate further in FY26, with the average pace expected to decline to 27 km a day from a peak of 37 km in FY21, according to a report by CareEdge Ratings. The slowdown highlights execution hurdles and weaker project awarding activity despite strong demand for infrastructure development.

The CareEdge Ratings report noted that construction activity is projected to contract by 7–10 per cent in FY26. Lower awarding of projects, pending approvals for Hybrid Annuity Model (HAM) projects, and execution challenges have weighed on the sector. Meanwhile, competition for NH-HAM bids has intensified, exerting additional pressure on developers.

Historical data shows the sector’s fluctuations:

FY18: A record 9,829 km constructed and 17,065 km awarded.
FY19: Project awards fell sharply to 5,493 km, though construction rose to 10,885 km.
FY21: Peak performance with 10,467 km awarded and 13,435 km built, averaging 37 km per day.
FY22: Construction slowed to 10,457 km (29 km/day) despite awards rising to 12,731 km.
FY24: 12,349 km constructed, averaging 34 km/day, while project awards slipped to 8,581 km.

For FY26, construction is projected at 9,900 km, translating to 27 km a day, reflecting the sector’s difficulty in sustaining earlier momentum.

Despite the moderation, industry watchers believe long-term demand for highways remains intact, with government initiatives under the Bharatmala Pariyojana and Gati Shakti framework expected to provide future impetus.

News source: Business World

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