India has emerged as the world’s second largest construction growth market, overtaking the United States and trailing only China, as the country’s infrastructure push, urbanisation and industrial expansion reshape the global project economy. According to the latest State of the Project Economy 2026 report by Berlin-based venture capital firm Foundamental, India is expected to account for 14.1 percent of global construction growth by volume between 2020 and 2030, ahead of the United States’ 11.1 percent share and second only to China’s 26.1 percent. Together, India and China are projected to contribute nearly 40 percent of global construction growth over the decade. The findings highlight Indiaโs rising importance in an industry that is becoming increasingly central to economic growth and technological transformation.
The report estimates that worldwide construction spending reached 15.97 trillion dollars in 2024 and is projected to rise to 19.86 trillion dollars by 2028, implying a compound annual growth rate of 5.6 percent. As investment in physical and digital infrastructure accelerates, capital expenditure is becoming concentrated among a handful of countries. India, China, the United States, Germany and France are emerging as the key drivers of the global project economy. The shift reflects policy priorities around domestic manufacturing, energy security, and digital capacity, with construction serving as the delivery mechanism for these national agendas. Large-scale public and private projects are creating sustained demand across engineering, procurement, and construction services.
Infrastructure is the fastest-growing segment within construction globally, expanding at a compound annual growth rate of 5.1 percent between 2020 and 2025. India’s infrastructure market is expected to grow even faster, at around 8 percent annually through the decade, according to the report. Large-scale investments in roads, railways, airports, logistics networks, metro systems and urban development projects are helping fuel the country’s rise. Rapid urbanisation and a manufacturing push are also contributing to higher construction activity. โIndia accounts for the second-largest share of global construction growth by volume between 2020 and 2030, at 14.1 percent, behind only China and ahead of the United States,โ said Shubhankar Bhattacharya, Co-Founder and General Partner at Foundamental.
The report identifies five structural forces driving the next phase of the project economy: re-industrialisation, data centre construction, energy infrastructure, civil infrastructure and defence infrastructure. Among these, the rise of artificial intelligence and cloud computing is expected to trigger a new construction cycle. Foundamental estimates that global data centre construction could double by 2030 compared with 2018 levels, adding between 10 percent and 15 percent to the overall construction market. India is already seeing hyperscale operators lease and build capacity in Mumbai, Chennai, Hyderabad, and Navi Mumbai to support artificial intelligence workloads and sovereign cloud requirements. This aligns with broader data centre infrastructure trends in India as power availability and fibre density become competitive advantages.
Energy infrastructure is also entering a major investment phase as rising electricity demand from artificial intelligence applications and electrification drives spending on renewable energy, battery storage and transmission networks. Indiaโs targets for solar, wind, and green hydrogen, combined with grid modernization, are creating multi-year construction pipelines. Civil infrastructure continues to benefit from government programs focused on highways, dedicated freight corridors, ports, and urban transit. Defence infrastructure adds another layer of demand, with investments in manufacturing hubs, bases, and logistics corridors. Together, these segments create a diversified order book for contractors, material suppliers, and equipment manufacturers. The concentration of growth in infrastructure and industrial construction is reshaping procurement models and financing structures across the sector.
Despite the rapid expansion, the report notes that construction productivity has improved by just 0.4 percent annually since 2000, highlighting the need for technologies that can improve efficiency and execution. Digital project management, modular construction, prefabrication, and automation are being adopted to reduce delays and cost overruns. Indiaโs scale gives it an opportunity to leapfrog legacy practices by integrating design for manufacturing and assembly, real-time monitoring, and workforce upskilling at the project level. Labour availability remains strong, but productivity gains will depend on standardization, supply chain integration, and access to capital equipment. More on global productivity benchmarks and technology adoption is available from the World Economic Forum.
Foundamental believes India is uniquely positioned to benefit from multiple long-term trends including infrastructure expansion, industrial development, digital transformation and the energy transition, making it one of the most influential contributors to global construction growth through 2030 and beyond. With 14.1 percent of global growth share, the countryโs project pipeline will influence material demand, engineering talent flows, and construction technology investment worldwide. Execution risk, financing discipline, and regulatory clearances will determine how much of the projected growth is realized. If current momentum holds, Indiaโs role in the project economy will continue to expand, positioning it as a critical node in the delivery of physical assets for the digital and industrial age.
