The Indian commercial construction industry has been steadily growing for years and has grown at a pace of nearly 10% annually over the past five years, said Naveen Prakash, chief executive officer of construction firm Bhaba Projects.
In the last three years, the sector grew from $10 billion to $16 billion, and has more than doubled in size since 2010, he said.
“Our growth is a reflection of a healthy domestic market and growing domestic infrastructure,” said Prakashi, who also heads the construction services division of the Indian Construction and Engineering Association.
The sector has been able to diversify because of a few factors, said Pramod Singh, an analyst with research firm Technopak.
The industry is a high-growth sector that is heavily dependent on capital investment.
It is very well connected to the Indian financial markets and the government and is very much linked to manufacturing,” he said, adding that this has also helped the industry diversify and gain new players in the global marketplace.
India is now the world’s third-largest construction market, after China and the United States. “
It is also very important that the sector is not over-saturated and that it has a very large pool of talent,” Singh said.
India is now the world’s third-largest construction market, after China and the United States.
A survey by PricewaterhouseCoopers (PwC) found that Indian construction is one of the fastest growing industries in the world.
The growth of the industry, however, is far from over.
While the number of employees employed in construction is growing, so are the cost of building, said Rajesh Kishore, chief financial officer of Construction Logistics Association of India.
He expects the industry to grow by 25% by 2021.
This will not be enough to sustain the industry’s growth, said Kisho, who added that more work needs to be done to make the infrastructure of the country more attractive for private investors.
He believes that in order to boost growth, more private capital will need to be poured into the industry.
“A lot of the infrastructure is not going to be ready until 2022, and it needs to get done now,” Kishor said.
Prakasak said that the government is working on measures to attract more private investment into the sector and improve infrastructure, including building a rail network.
This could help the industry become more competitive in the market, he added.
The construction industry is also seeing a resurgence in the past few years, as companies such as Bhabas Projects and Vibhuti Builders have started expanding their operations in the country.
But Prakasar said that it would take time for the industry growth to continue.
“The industry is not growing as fast as it used to.
The economy is growing very slowly and the country is not yet well-equipped to support its construction activities,” he added, adding the government needs to support private investment in the sector to ensure that the industry grows faster.
In addition, Kishori said that while the government has made some efforts to boost infrastructure development, they are still working on more effective measures to increase the productivity of construction workers.