India Sectoral Growth Drivers

 

  • India Sectoral Growth Drivers


  • • In FY26, India set target to construct 10,000 km of National Highways with 5800 km high speed corridor. Union government approved eight national high-speed corridor projects totalling 936 km with an investment of ₹50,655 crore. • The roads sector is likely to account for 18% capital expenditure over FY 2019-25 and Roads worth $200 Bn to be built in next 2 years. • NHAI is coming up with 23 new highways including network of expressways and economic corridors by March 2025. 
  • • Allocated ₹77,526 crore for Pradhan Mantri Awas Yojana-PMAY (Urban-₹19,794 crore & Rural- ₹54,232 crore) for FY26. • Real estate sector in India is expected to expand to $5.8Tn, contributing 15.5% to the country’s GDP by 2047. • ₹15,000 crore allocated for SWAMIH Fund 2.0 (Special Window for Affordable and Mid-Income Housing) to expedite completion of an additional 1 lakh housing units in stalled projects, 50,000 homes were completed till FY 24 and rest 40,000 expected by the end of 2026
  • • India manufacturing sector has potential to reach US$ 1 Tn by 2025-26 • Implemented PLI in 14 sectors with an outlay of ₹1.97 lakh crore to enhance domestic manufacturing & import substitution with potential to have additional production of ₹ 3 lakh crore in next 5 years. • Industrial Capex cycle has revived owing to other initiatives such as National Manufacturing Mission, ‘Vocal for Local’ and ‘China +1 Strategy aiming to position India as a global manufacturing hub.
  • • The railway capital allocation is maintained at ₹2.52 lakh crore for FY26. However, physical targets have been linked to production of 17,500 general coaches, 200 Vande Bharat and 100 Amrit Bharat trains. • Implementation of three major economic railway corridor under PM Gati Shakti initiative. • Metro projects allocation increased to ₹31,200 crore for FY26 to boost expansion of metro networks across cities. • The government is set to introduce ‘National Rail Plan’ to enable integration of rail network with other modes of transport for development of a comprehensive multi-modal transportation system
  • • The Government announced investment of ₹75,000 crore, for 100 critical transport infrastructure projects, for last and first mile connectivity for ports, coal, steel, fertilizer, and food grains sectors. • The Union Budget 2025-26 introduced an Urban Challenge Fund of ₹1 lakh crore aimed to developed “Cities as Growth Hubs” through creative redevelopment and better water & sanitation infra. • Powersector reforms with an increase in intra-state transmission capacity by states 
  • • Defense sector allocated ₹ 6,81,210 lakh crore in union budget 2025-26 reflecting a notable increase from last year’s ₹ 6.21 lakh crore. • ₹1.48 lakh crore is planned to be spent on Capital Acquisition (modernization budget) of Armed Forces and remaining ₹3.1 lakhs crore on Research & Development and infrastructural. This capital allocation has increased by 4.65% compared to previous fiscal year, • Emphasis on Domestic Procurement with ₹1.12 lakh crore (75% of the modernization budget) and private Sector Share ₹27,886 crore (25% of Defense domestic procurement)
  • • The Sagarmala Programme has identified 839 projects worth approximately ₹5.79 lakh crore for implementation by 2035. • The Ministry aims to complete projects worth ₹2 lakh crore in FY26 under Sagarmala Programme. • Over 310 projects worth ₹26,000 crore are focused on improving infrastructure and benefiting coastal communities, including fishermen. • India has plans to invest US$ 82 billion in port projects by 2035.
  • • Supportive government policies to build Logistics Parks and Free Trade Warehousing Zones (FTWZs) aims to reduce logistics costs and improve competitiveness. • The warehousing market in India valued at $60.42 Bn in 2024 and is projected to grow at a CAGR of 10.5% from 2025 to 2034, reaching USD 163.98 billion by 2034 • Indian warehousing and logistics sector is expected to attract ~$10 Bn investments over the next 4-5 years.
  • • 100 multimodal cargo terminals will be developed by FY26 to attract investments of a ~₹6,000 crore & handle over 1 million tonnes of cargo per terminal, enhance India's multimodal logistics capabilities. • The Indian logistics valued at $228.4 Bn in 2024 and is projected to reach $428.7 Bn by 2033. • The government's focus on deeper penetration into smaller towns is expected to enhance connectivity in goods movement, boost economic activity for better logistics and support MSMEs for improved supply chain.
  • • The Ministry of Agriculture & Farmers Welfare allocated ₹1.37 lakh crore in FY26 budget. • The Indian agricultural tractor market is projected to reach USD 7.92 billion in 2025 and grow to USD 10.95 billion by 2030, reflecting a CAGR of 6.7% during the forecast period • The agricultural machinery market in India, encompassing tractors and other equipment is expected to reach Agriculture ₹1.66 trillion by FY29, growing at a CAGR of approximately 6.69%

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