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NEW DELHI: India has overtaken the United States to emerge as the second-largest contributor to global construction growth this decade, according to a new international report.
This milestone reflects the country’s accelerated infrastructure development, rapid urbanisation, manufacturing resurgence, and rising investments in digital and energy projects, positioning it as a central force in the evolving global project economy.
Key Findings from the Report
According to the State of the Project Economy 2026 report by Berlin-based venture capital firm Foundamental, India is projected to account for 14.1% of global construction growth by volume between 2020 and 2030.
This places the country ahead of the United States at 11.1% and behind only China, which leads with 26.1%. Combined, India and China are expected to drive nearly 40% of worldwide construction expansion over this period.
Global construction spending stood at approximately $15.97 trillion in 2024 and is forecast to reach $19.86 trillion by 2028, growing at a compound annual growth rate (CAGR) of 5.6%.
Within this landscape, capital expenditure is increasingly concentrating in a few major economies, with India, China, the US, Germany, and France emerging as the primary drivers.
Within the broader construction sector, infrastructure, the fastest-growing segment globally is expanding at a CAGR of 5.1% between 2020 and 2025.
Drivers Behind India’s Construction Boom
India’s infrastructure sector is expanding at an impressive pace, with the market expected to grow at around 8% annually through the end of the decade significantly faster than the global average.
Major investments in highways, railways, airports, ports, metro systems, and logistics networks are fuelling this momentum. These projects not only support current economic activity but also lay the groundwork for sustained long-term development.
Rapid urbanisation continues to play a pivotal role. As millions migrate to cities each year in search of opportunities, demand surges for housing, commercial spaces, public transport, water systems, and other urban infrastructure. This steady pipeline of projects keeps construction activity robust across the country.
Manufacturing expansion is another key catalyst. The push for domestic production has led to the development of industrial parks, warehouses, logistics hubs, and supporting power and transport infrastructure.
Large, time-bound projects in manufacturing, energy, and real estate are increasingly defining India’s project economy, signalling greater maturity in execution capabilities.
Emerging Opportunities in Data Centres and Energy
The rise of artificial intelligence and cloud computing is creating fresh demand for data centre infrastructure. Globally, data centre construction is expected to double by 2030 compared to 2018 levels, potentially adding 10-15% to the overall construction market. India stands to benefit significantly due to growing digital adoption, data localisation policies, and expanding cloud and financial services needs.
Energy infrastructure represents another major growth avenue. Rising electricity demand from AI applications, electrification, and industrial growth is driving investments in renewable energy, battery storage, transmission networks, grid modernisation, and green hydrogen projects. Logistics infrastructure is also gaining traction as supply chains modernise.
This shift underscores India’s growing influence in global capital allocation for long-term projects. For decades, the country’s economic narrative centred on services and consumption.
Today, physical and digital infrastructure development has become a powerful parallel story, creating jobs, boosting allied sectors, and enhancing overall economic resilience.
Shubhankar Bhattacharya, Co-Founder and General Partner at Foundamental, noted: “India accounts for the second-largest share of global construction growth by volume between 2020 and 2030, at 14.1%, behind only China and ahead of the United States.”
He highlighted that global construction spending has exceeded previous forecasts, opening opportunities across multiple domains.
However, the report also points to persistent challenges, such as modest productivity growth in construction (just 0.4% annually since 2000), underlining the need for greater adoption of technology, modern methods, and efficient project execution to sustain this momentum.
India’s ascent in global construction rankings signals strong confidence in its economic trajectory. With continued policy support, private sector participation, and focus on sustainable and technology-driven development, the sector is well-placed to support the country’s broader ambitions of becoming a developed economy.
As Asia’s economic weight increases, India’s role as a major builder of the future is becoming increasingly prominent.
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