India Construction Industry Market Size & Forecast - by Value and Volume (area and units), 40+ Market Segments Across Residential, Commercial, Industrial, Institutional, Infrastructure Construction, City Level Construction by Value and Construction Cost S

According to ConsTrack360, construction market in India is expected to grow by 11.2% on annual basis to reach INR 25,315.7 billion in 2025.

The construction market in the country experienced robust growth during 2020-2024, achieving a CAGR of 14.2%. This upward trajectory is expected to continue, with the market forecast to grow at a CAGR of 8.8% during 2025-2029. By the end of 2029, the construction sector is projected to expand from its 2024 value of INR 22,774.1 billion to approximately INR 39,100.9 billion.

This report provides a detailed data-centric analysis of the construction sector in India, offering a comprehensive view of market opportunities in the building and infrastructure construction industry at the country level. With over 100+ KPIs covering growth dynamics in building and infrastructure construction, construction cost structure analysis, and analysis by key cities in the country, this databook provides a wealth of data-centric analysis with charts and tables, ensuring stakeholders are fully informed.

It offers a comprehensive analysis of market dynamics in the construction sector through a range of KPIs such as value, volume, and number of units. The building construction covers detailed segmentation over 30+ segments in residential, commercial, industrial, and institutional sectors.

ConsTrack360’s research methodology is based on industry best practices. Its unbiased analysis leverages a proprietary analytics platform to offer a detailed view of emerging business and investment market opportunities.

Key Insights

India Residential Construction
The Indian residential construction industry is undergoing a significant transformation driven by macroeconomic factors, government initiatives, and emerging industry trends. While inflation and rising material costs are increasing housing prices, the demand for affordable housing under PMAY remains strong, especially in tier-2 and tier-3 cities. At the same time, technological advancements such as AI-driven property management and modular construction methods are streamlining project execution. However, bureaucratic delays and regulatory changes continue to pose challenges, slowing the progress of several projects and widening the housing demand-supply gap. Despite these challenges, the sector is seeing a steady influx of investment, supported by a ₹79,000 crore allocation in the Union Budget 2024 and growing foreign direct investment in real estate. The government’s push for smart cities, sustainability, and ease of doing business reforms is shaping the future of residential construction, with an increasing focus on green buildings and energy-efficient housing solutions. Addressing the skilled labor shortage through vocational training programs and regulatory improvements will be essential to sustaining industry growth. With continued innovation, investment, and policy support, India’s residential construction sector is poised for long-term expansion and modernization.

Macroeconomic Factors
• Rising material costs, particularly cement, steel, and labor, are increasing housing prices in urban and semi-urban areas. Higher interest rates on home loans are also reducing demand, particularly among the middle-class segment, slowing overall residential sales.
• Delays in supply chains and raw material shortages continue to impact project completion timelines, increasing the financial burden on developers. However, the demand for affordable housing remains strong, especially under government-backed initiatives such as Pradhan Mantri Awas Yojana (PMAY).
• Developers are increasingly adopting prefabrication and modular housing solutions to accelerate project completion. At the same time, rising disposable income is fueling growth in luxury and gated community projects in metropolitan regions.

Project Landscape
• Several key residential projects are shaping India's housing sector, including the DDA Housing Scheme 2024 in Delhi and Brigade Cornerstone Utopia in Bangalore, focusing on affordability and smart housing solutions. The Lodha Crown project in Mumbai further highlights the shift toward sustainable and community-centric urban developments.
• Private developers dominate high-end and urban residential projects, while public sector efforts focus on affordable housing and slum redevelopment. This division ensures broader market coverage but also highlights gaps in regulatory coordination.
• With ₹79,000 crore allocated for housing and urban infrastructure in the Union Budget 2024, the sector is set to benefit from increased government spending. Moreover, rising foreign direct investment (FDI) in luxury and mixed-use developments signals a growing investor confidence in India’s real estate sector.

Government Policies & Programs
• The PMAY initiative continues to play a crucial role in expanding affordable housing across urban and rural India, with credit-linked subsidies improving accessibility for low-income buyers. Simultaneously, the Smart Cities Mission integrates residential development with improved urban infrastructure.
• Tax incentives such as deductions on home loan interest under Section 80C and 24(b) of the Income Tax Act encourage homeownership. Additionally, regulatory reforms, including fast-tracked approvals for green building projects, are streamlining development processes.
• These policy measures balance affordability with sustainability, ensuring long-term industry growth. The combination of incentives and infrastructure expansion will enhance the residential construction ecosystem in the coming years.

Industry-Specific Developments
• Technological advancements such as AI-driven property management and 3D printing in construction are transforming India's residential sector. Smart homes with IoT-enabled solutions are gaining traction, particularly in major metropolitan areas.
• Sustainability is emerging as a core focus, with net-zero energy homes and LEED-certified buildings becoming more prevalent. Developers also incorporate solar-powered energy grids into residential communities, aligning with India's broader renewable energy goals.
• Despite these advancements, a shortage of skilled labor remains a challenge, particularly in high-rise construction. The government is addressing this issue by expanding vocational training programs under the Skill India Mission, aiming to create a more competent workforce for future projects.

India Commercial Construction
The commercial construction sector in India is undergoing a transformation driven by rising demand for mixed-use spaces and Grade-A office developments. However, inflation and high raw material costs put financial pressure on developers, while regulatory delays hinder project execution. Despite these challenges, the demand for premium office spaces, retail centers, and IT hubs remains strong, particularly in tier-1 and tier-2 cities. Government initiatives such as Make in India and Startup India fuel office space demand, supported by tax incentives for Real Estate Investment Trusts (REITs) and foreign direct investment. Additionally, sustainability trends, including solar-powered commercial buildings and AI-driven property management, are shaping the future of commercial construction. Addressing the skilled labor shortage and improving regulatory efficiency will be critical to sustaining growth and ensuring long-term success in India's commercial real estate sector.

Macroeconomic Factors
• Rising commercial leasing costs impact office space demand, particularly in high-demand metro cities. Additionally, the high cost of raw materials increases developers' project expenses, making new commercial developments more expensive.
• A growing trend in mixed-use commercial spaces is transforming the industry, integrating retail, office, and co-living concepts to optimize urban real estate utilization. At the same time, there is significant expansion in Grade-A office spaces, especially in tier-1 and tier-2 cities, driven by corporate growth and foreign investment.
• Despite these positive trends, challenges such as an oversupply of office spaces in certain metro regions are creating competitive pressures. Furthermore, regulatory delays in commercial real estate approvals slow project execution, affecting investor confidence.

Project Landscape
• Major ongoing projects such as DLF Downtown in Gurgaon reinforce India’s position as a commercial and IT hub. Meanwhile, the expansion of Phoenix Marketcity in Bangalore highlights the demand for large-scale retail and entertainment complexes.
• Private developers dominate premium commercial projects, with significant investments in high-end office spaces and retail centers. At the same time, public-private partnerships (PPPs) are gaining traction, particularly for urban commercial infrastructure development.
• Foreign direct investment (FDI) inflows into the commercial real estate sector remain strong, especially in retail and office space development. Additionally, government incentives for IT parks and special economic zones (SEZs) further encourage commercial construction investment.

Government Policies & Programs
• The Make in India and Startup India initiatives drive increased demand for office spaces as more companies establish operations in India. This trend is particularly evident in IT hubs and financial districts, where leasing activity is rising.
• Tax incentives for commercial real estate investments are being offered through Real Estate Investment Trusts (REITs) to attract investors. These incentives are improving liquidity in the sector and providing an alternative funding mechanism for developers.
• Government-backed policies and incentives are expected to further strengthen the commercial real estate landscape, facilitating a favorable business environment. The sector can maintain sustainable growth by ensuring policy stability and streamlined regulatory processes.

Industry-Specific Developments
• Technological advancements such as AI-driven property management are enhancing efficiency in commercial real estate. These innovations help optimize building operations, energy consumption, and tenant experience.
• Sustainability is becoming a priority, with commercial developers integrating solar-powered solutions into office buildings and retail centers. Green building certifications are gaining importance, reflecting an industry-wide shift toward environmentally responsible construction.
• However, a shortage of skilled labor for high-end commercial projects remains a critical challenge. Addressing this gap through workforce training and upskilling programs will be essential to support the sector’s long-term growth and development.

India Institutional Construction
The institutional construction sector in India is poised for long-term growth, driven by significant government investments in healthcare, education, and research infrastructure. The expansion of AIIMS hospitals, IITs, IIMs, and PM SHRI schools highlights the country’s commitment to modernizing institutional facilities. However, rising construction costs, labor shortages, and regulatory delays continue to challenge project timely execution. Addressing these issues through streamlined approval processes and workforce development programs will be essential for sustaining momentum in the sector. Public-private partnerships (PPPs) are crucial in accelerating institutional construction, particularly in specialty hospitals and research facilities. Additionally, sustainability initiatives such as solar-powered campuses and green-certified buildings are receiving preferential funding and regulatory support. While budget constraints and compliance costs remain concerns, leveraging smart infrastructure and green building strategies can enhance operational efficiency and reduce long-term expenses. India’s institutional construction industry can achieve sustainable and scalable growth by focusing on collaborative efforts between the public and private sectors.

Macroeconomic Factors
• The rising costs of raw materials such as steel, cement, and electrical components significantly impact the construction of educational, healthcare, and government buildings. Additionally, currency fluctuations and high borrowing costs due to increased interest rates are further straining project financing.
• Expansion of medical infrastructure is a key trend, with substantial investments directed toward AIIMS hospitals and district-level healthcare facilities. Similarly, higher education institutions, including new IIT, IIM, and medical college campuses, are seeing significant development to support India’s growing demand for skilled professionals.
• Despite these advancements, institutional construction faces challenges such as budget constraints, particularly impacting large-scale public-sector projects in rural areas. Furthermore, bureaucratic delays in obtaining approvals and compliance with green building norms continue to slow construction timelines.

Project Landscape
• Several high-profile projects are shaping India's institutional construction sector, including the AIIMS Expansion Projects, the PM SHRI Schools Initiative, and the IIM & IIT Expansion Projects in tier-2 and tier-3 cities. These projects aim to strengthen healthcare and education infrastructure across the country.
• Institutional construction remains largely dependent on public-sector funding, but private investments in premium healthcare and educational institutions are growing. Additionally, public-private partnerships (PPPs) are increasingly important, especially in specialty hospitals and research infrastructure.
• Investment in the sector is also being driven by ₹6 lakh crore allocated in the Union Budget 2024 for healthcare infrastructure, along with increased funding for research institutions under the National Education Policy (NEP) 2020. The focus on smart infrastructure under Digital India is further boosting funding for modern government buildings.

Government Policies & Programs
• Government initiatives such as PM-ABHIM, the National Education Policy (NEP) 2020, and the Digital India Mission are transforming institutional construction by improving healthcare, education, and e-governance infrastructure. These initiatives aim to modernize facilities while ensuring accessibility in urban and rural areas.
• The government is offering tax incentives and fast-tracking approvals for institutional projects in high-demand areas to encourage private sector participation. Additionally, public funding and grants are being allocated to promote the construction of green-certified institutional buildings, aligning with sustainability goals.
• At different levels of governance, the central government is leading large-scale initiatives, while state and municipal bodies are focusing on localized healthcare and education infrastructure. These multi-tiered interventions are critical for ensuring widespread institutional development.

Industry-Specific Developments
• Technology is playing an increasing role in institutional construction, with AI-driven hospital management systems improving healthcare efficiency and smart classrooms enhancing education infrastructure. The use of modular construction techniques is also reducing project completion timelines.
• Sustainability is becoming a key priority, with institutions incorporating solar power, low-carbon materials, and water conservation systems into their construction plans. These green initiatives reduce the carbon footprint and lower operational costs in the long run.
• A major challenge remains the shortage of skilled labor for high-tech institutional projects. The government is addressing this issue through vocational training programs under the Skill India initiative, aiming to bridge workforce gaps and support the expansion of institutional construction.

India Industrial Construction
India's industrial construction sector is rapidly expanding, fueled by government-backed initiatives such as Make in India 0 and the Production Linked Incentive (PLI) scheme. Investments in semiconductor fabrication, EV manufacturing, and green hydrogen plants are positioning India as a global hub for high-tech and sustainable industries. However, challenges such as rising material costs, regulatory complexities, and land acquisition delays continue to impact project execution timelines and overall industrial growth. Addressing these structural issues will be crucial to maintaining momentum in large-scale industrial developments. Public-private partnerships (PPPs) and foreign direct investment (FDI) from major global corporations are key in accelerating industrial expansion. Additionally, sustainability-driven incentives and smart manufacturing technologies are transforming the sector, enabling greater efficiency and environmental compliance. While workforce shortages in precision manufacturing and automation remain a pressing challenge, ongoing skill development programs under Skill India aim to bridge this gap. Collaborating efforts between government and industry stakeholders will sustain India's industrial growth, enhance global competitiveness, and ensure long-term economic benefits.

Macroeconomic Factors
• Rising costs of essential materials such as steel, cement, and machinery increase industrial construction expenses, making large-scale projects more expensive. Additionally, currency depreciation and higher import duties on industrial equipment further increase capital expenditure for setting up manufacturing plants.
• India’s industrial sector is significantly expanding, particularly in dedicated freight corridors and high-tech manufacturing hubs. The growing demand for logistics infrastructure, driven by e-commerce and supply chain expansion, is also fueling investment in large-scale warehousing projects.
• Despite strong growth, challenges such as land acquisition delays and strict regulatory compliance in Special Economic Zones (SEZs) continue to hinder project execution. Additionally, the shortage of skilled labor in automation, robotics, and precision manufacturing is impacting the timely completion of industrial projects.

Project Landscape
• Major industrial projects such as the Tata Group Semiconductor Plant in Gujarat and the Foxconn Manufacturing Hub in Tamil Nadu highlight India's push toward high-tech manufacturing. Additionally, investments in green hydrogen manufacturing position India as a leader in clean energy production.
• The private sector remains dominant in industrial investments, particularly in the automotive, electronics, and pharmaceutical sectors. However, the public sector is driving the expansion of industrial corridors, logistics parks, and freight networks to support manufacturing growth.
• Government-backed Production-Linked Incentive (PLI) schemes and rising foreign direct investment (FDI) from global corporations such as Tesla, Apple, and Samsung are strengthening India's industrial infrastructure. Additionally, the government is incentivizing net-zero manufacturing to promote sustainability in industrial development.

Government Policies & Programs
• Key initiatives such as Make in India 0 and the PLI Scheme accelerate domestic manufacturing and reduce import dependency. Additionally, the National Logistics Policy streamlines supply chain networks, improving efficiency and reducing industrial project logistics costs.
• The government offers special tax benefits and duty reductions for companies investing in automation and digital manufacturing to encourage industrial development. Introducing single-window clearance systems for industrial parks further simplifies regulatory processes.
• At the federal and state levels, governments actively support industrial construction through land subsidies, infrastructure incentives, and streamlined environmental clearances. These interventions are expected to create a more favorable environment for industrial growth.

Industry-Specific Developments
• Integrating AI, IoT, and robotics transforms industrial construction by improving production efficiency and facility management. Additionally, digital twin technology is increasingly used to optimize industrial facility design and operations.
• Sustainability is a key focus, with industries adopting low-carbon concrete, solar energy solutions, and waste recycling programs to reduce environmental impact. Additionally, circular economy practices are encouraged to minimize industrial waste and improve resource efficiency.
• However, there is a high demand for skilled workers in automation, precision manufacturing, and logistics management. The government is expanding vocational training programs under the Skill India initiative to bridge workforce shortages, particularly in high-tech industries such as semiconductors and clean energy.

India Infrastructure Construction
India’s infrastructure construction industry is experiencing rapid growth, driven by strong government investment in transport, energy, and urban development projects. Large-scale initiatives such as the Mumbai-Ahmedabad High-Speed Rail, Bharatmala Project, and Gati Shakti Master Plan enhance connectivity and logistics efficiency. However, rising material costs, supply chain disruptions, and labor shortages continue to pose challenges, impacting project timelines and overall construction budgets. Addressing these bottlenecks through policy reforms, skill development programs, and technology adoption will be critical to sustaining long-term infrastructure growth. The sector also sees increasing public-private partnerships (PPPs) and foreign direct investment (FDI) in smart infrastructure, renewable energy, and transit hubs, supporting India’s vision for sustainable urban development. Regulatory hurdles and financing constraints remain key challenges, but government-backed incentives, fast-track approvals, and green financing mechanisms are helping mitigate risks. With a strong focus on digital infrastructure, smart city development, and energy-efficient public projects, the industry is set to play a crucial role in India’s economic expansion and urban transformation in the coming years.

Macroeconomic Factors
• Rising steel, cement, and asphalt costs are increasing infrastructure project budgets, making large-scale developments more expensive. Additionally, supply chain disruptions affect the availability and pricing of imported construction equipment, further straining project timelines and costs.
• The industry is seeing a rapid expansion of high-speed rail and metro projects to improve urban mobility and intercity connectivity. Simultaneously, investments in renewable energy infrastructure, such as large-scale solar and wind farms, support India’s transition toward sustainable infrastructure development.
• Despite this growth, regulatory delays and environmental clearance requirements slow project execution. Additionally, high public debt levels are limiting government spending, while complex approval processes hinder private sector participation.

Project Landscape
• Key infrastructure projects, including the Mumbai-Ahmedabad High-Speed Rail, Bharatmala Project, and Delhi-Mumbai Expressway, are reshaping India’s transportation network. These developments aim to enhance connectivity, reduce travel time, and improve logistics efficiency nationwide.
• While the public sector remains the primary driver of infrastructure investment, public-private partnerships (PPPs) are increasing in toll roads, metro systems, and smart city developments. Institutional investors also actively fund green infrastructure projects, particularly renewable energy and waste management.
• Budget allocations for infrastructure have reached ₹10 lakh crore under the Gati Shakti Master Plan, signaling strong government commitment. Additionally, rising foreign direct investment (FDI) in smart infrastructure, logistics parks, and transit hubs supports long-term industry growth.

Government Policies & Programs
• Major government initiatives, such as the Gati Shakti National Master Plan, Smart Cities Mission, and National Infrastructure Pipeline (NIP), are driving multimodal infrastructure development and digital integration. These programs aim to improve India's logistics, urban planning, and energy infrastructure.
• Tax incentives and fast-track approvals for strategic infrastructure projects have been introduced to encourage private sector participation and reduce bureaucratic delays. Additionally, green financing mechanisms are being promoted to support sustainable infrastructure development.
• At various governance levels, the central government is leading large-scale highway, railway, and energy projects, while state governments focus on metro rail and regional transport networks. Municipalities also play a key role in investing in smart city projects, road expansions, and urban waste management solutions.

Industry-Specific Developments
• Technological advancements such as AI-driven traffic management, drone-based site monitoring, and 3D printing for construction improve efficiency and reduce costs. These innovations are helping infrastructure projects meet deadlines while enhancing safety and quality.
• Sustainability remains a priority, with a growing adoption of low-carbon concrete, eco-friendly materials, and energy-efficient transit hubs. Additionally, increased investments in smart grids and battery storage support integrating renewable energy into infrastructure projects.
• Workforce shortages in civil engineering, skilled trades, and construction management continue to be challenging. However, government initiatives such as Skill India and apprenticeship programs are helping train workers in renewable energy and smart infrastructure technologies to bridge the skills gap.

Scope

• Market Data and Insights: This report provides market size and forecast across 40+ construction segments for ten years from 2019 – 2028 in India. KPIs covered include the following:
• Market size by value
• Market size by volume of construction
• Number of units

• India Economic Indicators

• India Top Cities Construction Data

• India Residential Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
• Housing type (multi family, single family)
• Key cities (Tier – 1, Tier – 2, Tier – 3 segmentation)
• Price point/income level (luxury, mid-tier, affordable)
• Construction stage (new construction, re-development & maintenance)

• India Residential Green Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
• Green building by Housing type (multi family, single family)
• Green building by Key cities (Tier – 1, Tier – 2, Tier – 3 segmentation)
• Green building by Price point/income level (luxury, mid-tier, affordable)

• India Commercial Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
• Office (further broken down by Grade A, Grade B, and Grade C)
• Retail (further broken down by Grade A, Grade B, and Grade C)
• Hospitality (further broken down by Grade A, Grade B, and Grade C)
• Restaurant (further broken down by Grade A, Grade B, and Grade C)
• Entertainment
• Sports facility
• Other commercial building construction
• Construction stage (new construction, re-development & maintenance)

• India Commercial Green Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
• Office green building construction
• Retail green building construction
• Hospitality green building construction
• Restaurant green building construction
• Entertainment green building construction
• Sports facility green building construction
• Other commercial green building construction

• India Industrial Green Building Construction Coverage: 10-year market size & forecast in value and volume (area and units)
• Manufacturing Plants building construction
• Chemical & Pharmaceutical building construction
• Metal & Material Processing building construction
• Construction stage (new construction, re-development & maintenance)

• India Institutional Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
• Healthcare construction
• Educational construction
• Other building construction
• Construction stage (new construction, re-development & maintenance)

• India Institutional Green Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
• Healthcare green building construction
• Educational green building construction

• India Infrastructure Construction Sectors: 10-year market size & forecast in value terms by
• Marine and inland water infrastructure
• Utility system construction (oil and gas infrastructure, communication infrastructure, power infrastructure, water and sewer infrastructure)
• Transportation infrastructure (highway, street and bridge construction, railway construction, airport construction, and tunnel construction)
• Construction stage (new construction, re-development & maintenance)

• India Green Infrastructure Construction: 10-year market size & forecast in value terms

• India Construction Cost Structure Analysis: 10-year market size & forecast in value terms
• Cost Analysis by Type (Material, Labour, Equipment, Others)
• By Material & Work Cost: It provides the cost outlook of material costs by type of materials used in construction (Cement, Steel, Sand, Aggregates, Bricks, Wood, Windows Glazing, Flooring, Plumbing, Electrical, Painting, Other Materials)
• By Labour Cost: It provides the cost outlook of labour costs (RCC Construction Work, Masonry and Plastering Work, Plumbing Work, Water Proofing Work, Carpentry Work, Electrical Work, Tile Fixing Work, CATV Antenna Points, Painting Work, Departmental Labour)
• By Type of Construction (New, Re-Development)
• By Material Cost: It provides the cost outlook of material costs by type of materials used in construction (Concreting Sand, Stone Aggregate, Ordinary Portland Cement, Reinforced Concrete (Grade 30 MPA), Reinforced Concrete (Grade 40 MPA), High Tensile Steel bars, Mild Steel Round Bars, Structural Steelwork, Plywood Formwork (1800*900*12mm), Clay Bricks)
• Type of Labour (Skilled vs. unskilled)

Reasons to buy

• Comprehensive Insight into Construction Market Dynamics: Gain a deep understanding of the construction market, including opportunities, industry trends, and key drivers across over 40+ market segments and sub-segments.

• Detailed Analysis of Construction Costs: Explore construction costs broken down by type, including material and labor costs. The report provides detailed information on costs by construction type and worker.

• Top Ten Cities Construction Value: Access valuable data on the construction market size for major cities, focusing on key city-level sectors.

• In-Depth Volume and Value Data: Obtain a thorough understanding of the market from both value and volume perspectives, covering historical data and forecasts by activity and units.

• Strategic Market-Specific Insights: Formulate targeted strategies by identifying growth segments and opportunities and assessing key trends, drivers, and risks within the construction industry.

• City-Level Trend Analysis: Get detailed trend analyses for tier-1, tier-2, and tier-3 cities, offering actionable insights for urban-focused strategies. Show more