India cuts new highway target for FY26. But it is for the better

The Centre plans to complete 3,300 km of access-controlled highways in 2025-26 financial year, according to the annual report of ministry of road transport and highways (MoRTH). The cumulative length of such operational corridors, which regulate traffic entering or leaving the highways to offer high-speed driving, is expected to reach 5,800 km, up from 2,474 km constructed over the last few years until December 2024.

However, the country’s overall highway construction is expected to slip further to 10,000 km in FY26 from 12,000 km targeted in each of the two previous years.

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India added 12,349 km of highways in FY24, 10,331 km in FY23 and 10,457 km in FY22. In FY25 so far, the construction has remained slow at 5,853 km up to December and is expected to end with 10,000-10,500 km by March.

“The reduction in highway construction targets for FY26 likely reflects a combination of factors,” said Jagannarayan Padmanabhan, senior director and global head (transport, mobility and logistics) at Crisil Market Intelligence and Analytics. “First, as the network expands, we are naturally moving from high-volume, relatively straightforward projects to more complex, access-controlled corridors that require longer planning and execution timelines. While we may not have reached absolute saturation, the focus is certainly shifting toward improving efficiency, decongesting key corridors, and integrating highways with logistics and urban transport systems.”

The length of four-lane highways is expected to grow 8% in FY26. National highways with four or more lanes (excluding high-speed corridors) have more than doubled from 18,278 km to 45,947 km in the decade through December 2024.

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Lower construction and awarding of regular highway projects, however, is also expected to bring down the monetization target for state-run NHAI to ₹30,000 crore in FY26 from an already reduced target of ₹39,000 crore in 2024-25, according to the ministry’s annual report. MoRTH had raised ₹40,314 crore by handing over highways to private contractors for collecting toll and maintenance in 2023-24.

The government is also targeting to bring more private capital of up to ₹35,000 crore under build operate and transfer (BoT) route in FY26. Most of this capital would come from multi-lane highways and access-controlled expressways.

The pace of highway construction had spiked in FY21 to around 13,000 km a year (37 km/day), but has since moderated to around 10,000-11,000 km per annum, according to Kuljit Singh, partner and national leader, Infra, EY India.

“But there is a significant scope for new highway development/expansion in India as four-lane highways still comprise a small percentage of overall network. Hence, low rate of highway construction is more a supply-side issue,” he said. He called for more information on pre-highway development activities including land acquisition, preparation of viable project reports, compensation payments, increasing pace of utility shifting, tree clearance and the removal of encroachments. Lack of this data results in spikes in costs and reduces highway bidding and construction, he said.

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MoRTH is also focusing on making Indian highways safer. It plans to remove at least 1,000 black spots (that witness a high number of accidents with fatalities) on national highways and conduct a safety audit for 40,000 km of network.

India has the world’s second largest road network, with national highways (NH) spanning 146,195 km, forming the primary arterial grid of the country. The NH network has grown 60% in the past decade, rising from 91,287 km in 2014 to 146,195 km currently. The length of national high-speed corridors (HSC) has increased from 93 km in 2014 to 2,474 km at present. The length of four-lane and above national highways (excluding HSCs) has more than doubled, expanding from 18,278 km in 2014 to 45,947 km at present.

Currently, 1,366 projects with total length of about 32,366 km are under construction across the country, including in Chhattisgarh, Rajasthan and all of Northeast. Most of these projects are targeted to be completed in phases by 2027-28 financial year.

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