The revised estimate of 9,000-9,500 km, down from an earlier forecast of 9,500-10,000 km, reflects the impact of an extended monsoon and slower project awarding across FY2024 and FY2025.
India’s road construction activity is projected to slow sharply in FY2026, with the Ministry of Road Transport and Highways (MoRTH) expected to execute just 9,000-9,500 km, according to ratings agency ICRA. This translates to a daily pace of 25-26 km, the lowest in five years.
The revised estimate, down from an earlier forecast of 9,500-10,000 km, reflects expectations of weaker execution in the current year. The slowdown is attributed to an extended monsoon and a decline in project awarding across FY2024 and FY2025.
Execution fell 14 per cent year-on-year to 10,660 km in FY2025, down from 12,349 km in FY2024. Concurrently, project awards by MoRTH are estimated to remain flat at 8,000-8,500 km in FY2025; a level significantly below the awarding momentum seen between FY2021 and FY2023.
ICRA expects a modest pickup in awards to 9,000-9,500 km in FY2026, supported by improved readiness in the latter half of the year. A recent ministry directive mandates that projects can only be awarded after securing 90 per cent right-of-way, forest clearances, and General Agreement Drawing (GAD) approvals for bridges.
The tightening of bidding norms for hybrid annuity model (HAM) and engineering, procurement, and construction (EPC) projects has been described by ICRA as a welcome move. However, competitive intensity is expected to remain high in the near term. With contractor order books under pressure, a sustained pickup in awarding activity from MoRTH will be critical to ease competition and support sector profitability.
On the revenue front, toll collections are projected to grow by 5-8 per cent in FY2026, driven by 3-4 per cent traffic growth and annual toll rate increases of 2.3-4 per cent. In a significant push for asset monetisation, the National Highways Authority of India (NHAI) could raise ₹350–₹400 billion in FY2026 through toll-operate-transfer (TOT) bundles and its Infrastructure Investment Trust (InvIT).
This would take NHAI’s cumulative monetisation since inception to around ₹1.3 trillion, achieving 81 per cent of the National Monetisation Pipeline target of ₹1.6 trillion.