India: A Projects, Infrastructure & Energy Overview

Foreign Investment and State Policy Leading to Unprecedented Growth in Energy Infrastructure

The energy and infrastructure landscape in India has undergone unprecedented growth in recent years, shaped by a decade of transformative policies, an evolving regulatory framework and an increasingly favourable investment framework. The Union Budget 2026–27 has reinforced this growth trajectory, allocating INR1.22 trillion (ie, 3.1% of India’s estimated GDP) for capital expenditure in the infrastructure sector, evidencing the government’s continued commitment to infrastructure-led economic development. The government’s forward-looking agenda includes strategic allocation of funds across traditional and emerging sectors (such as semiconductors, data centres and green hydrogen). India is expected to contribute nearly 25% of increased global energy demand through 2045, positioning the country as an indispensable participant in the global energy transition.

Various forms of foreign investment flows have driven this growth cycle, including:

• the India–US framework for technology co-operation, which was announced in February 2026, and which is set to significantly expand bilateral trade in technology products, including data centre infrastructure;
• global logistics-focused players strengthening their investments in the integrated supply chain; and
• notable portfolio repositioning in the renewable energy sector with increased impetus towards energy storage solutions.

India’s strong macroeconomic fundamentals and structural cost competitiveness (for instance, data centre development costs are 40–50% lower than in the United States and up to 60% lower than in Japan, and power costs are 30–40% cheaper) have further accelerated infrastructure development. The post-pandemic period has also seen a strategic shift towards new energy platforms, with leading domestic companies and global investors increasingly focusing on emerging green infrastructure, including battery storage, green hydrogen, e-mobility, and carbon markets.

The state-level policy frameworks have played a critical role in India’s infrastructure evolution and India’s federal structure has enabled policy co-ordination between the central government and the states. As a result, several states have emerged as sectoral leaders, introducing targeted, investor-friendly initiatives and attracting substantial domestic and international capital across key infrastructure and energy segments. A few recent examples include:

• dedicated “rare earth corridors” announced in Odisha, Kerala, Andhra Pradesh and Tamil Nadu;
• the PM E-Drive scheme targeting 72,000 fast electric vehicle chargers nationwide; and
• a proposed infrastructure risk guarantee fund (IRGF) in the Union Budget 2026–27.

The Energy and Infrastructure Sectors That Are Underpinning Growth

A defining feature of India’s energy and infrastructure sectors has been their transition towards newer technologies and emerging segments. With several next-generation platforms now achieving commercial and economic viability, these sectors are entering a new phase of innovation-led growth. The principal sectors underpinning this transition are set out below.

Energy storage is becoming increasingly critical. Effective grid utilisation – both on a standalone basis and co-located with energy generating plants (renewable and conventional) – has grown. India’s energy storage system market witnessed a revolutionary year in 2025, with 69 tenders issued for a total capacity of 102 GWh (a 35% increase from 2024). The commissioning of India’s first merchant battery energy storage system project in Bikaner, Rajasthan, marks a watershed moment – demonstrating the viability of standalone storage projects.

Green hydrogen has emerged as a centrepiece of India’s energy transition, supported by sustained policy commitment and growing private sector momentum. Along with the incentives provided in the Union Budget 2026–27, funds are being allocated to pilot projects, electrolyser manufacturing and hydrogen mobility initiatives, including the rollout of 37 hydrogen vehicles across ten designated routes as part of India’s National Green Hydrogen Mission. Significantly, three major ports have now been recognised as “green hydrogen hubs”, positioning India’s maritime infrastructure as potential export gateways for green hydrogen and ammonia to global markets.

India’s aviation sector has experienced robust growth, with several expansion plans for airport infrastructure. Whilst traditional airport development continues, the focus is increasingly shifting toward sustainability-forward upgrades, including energy-efficient terminal designs, solar-powered operations and green building certifications. As Indian aviation advances its decarbonisation objectives, sustainable aviation fuel (SAF) – produced from feedstocks such as agricultural residues, used cooking oil and municipal solid waste – offers a viable pathway to reduce aviation emissions.

The growth of data centres has attracted significant interest from leading technology companies and has been further accelerated by decisive policy support in recent years, amid the global expansion of artificial intelligence (AI). India offers greenfield land, power infrastructure, relatively streamlined regulations, and access to water resources in designated zones – all of which have positioned the country as an attractive destination for global AI and cloud workloads.

The electric mobility and charging infrastructure sectors are being scaled up by the government, with several new policies and schemes. Under the PM E-Drive scheme, the government has earmarked INR20 billion for charging infrastructure with a target of deploying 72,000 fast chargers across cars, buses, trucks and two and three-wheelers. Multiple states – including Uttar Pradesh, Rajasthan, Kerala, Telangana, Bihar and Odisha – have already submitted proposals for charging infrastructure deployment under the scheme.

Waste-to-energy (WtE) is emerging as an important solution in India as urban centres confront rising municipal solid waste volumes and increasing pressure on landfill capacity. Supported by the government’s Swachh Bharat Mission, which promotes waste segregation and processing, and with local urban bodies increasingly adopting public–private partnership (PPP) models, WtE projects have moved beyond pilot initiatives to commercially viable and bankable infrastructure assets.

The development of warehousing and logistics infrastructure has been promoted by the PM Gati Shakti National Master Plan integrating road, rail, port and inland waterway networks. With 35 Multi-Modal Logistics Parks under development, 839 projects identified under the Sagarmala Programme, dedicated freight corridors and strategic deep-water ports such as Vadhavan (a “green” port under construction in Maharashtra) progressing toward completion, the logistics sector is attracting significant domestic and international capital.

Water desalination presents a compelling growth opportunity as India confronts freshwater scarcity across coastal and arid regions. Several coastal states are advancing desalination projects to support municipal supply and industrial corridors, positioning the technology as a critical component of urban and industrial water security amid increasing climate-driven stress on conventional freshwater sources in India’s water-stressed regions.

India’s PPP Maturity Fuels Capital Recycling

India’s PPP framework, supported by an established track record across roads, renewable and conventional power sectors, has achieved improved bankability, continuing to attract capital even as investor interest shifts towards newer sectors. The proposed IRGF is expected to provide partial credit guarantees to lenders, strengthening risk mitigation, while recent proposals by the Securities and Exchange Board of India to permit infrastructure investment trusts (InvITs) to hold assets beyond their initial tenure aim to enhance structural flexibility and investor confidence.

Notably, portfolio exits by international players, including Shell from Sprng Energy, Statkraft’s India divestment attracting interest from Blackstone, and Fortum’s renewables sale to Hexa Climate, reflect maturity-driven capital recycling rather than market retreat, with established funds crystallising returns and redeploying into other emerging infrastructure sectors.

The regulatory framework supporting the energy and infrastructure sectors continues to evolve towards greater policy coherence, streamlined single-window clearances and sector-specific incentives that are backed by central government measures that have enhanced financial viability through targeted fiscal support, including tax holidays, customs duty exemptions and production-linked incentives. Taken together, these steps present a compelling growth narrative for India’s infrastructure sector, which is poised for sustained, large-scale and structured expansion.