c

Mehul Pandya, MD and Group CEO, CareEdge said, “The scale of India’s public investment reflects the determination of building an infrastructure ecosystem. Union Government’s capital expenditure on key infrastructure sectors, basis the Union Budget FY2026-27, is equivalent to 3.1% of GDP. This sustained capex push has created a multiplier effect across various sectors, services, employment, and regional development. It has also strengthened India’s capacity to attract private investment by improving project visibility, reducing execution risks, and expanding monetisation opportunities. India is on track to make integrated infrastructure initiatives its competitive advantage.”

The ‘Infrastructure Landscape: Vision for Viksit Bharat’ report assesses the evolving landscape across power, renewable energy, solar manufacturing, smart metering, transmission, nuclear power, data centres, roads, ports, airports and Infrastructure Investment Trusts (InvITs), highlighting the opportunities and key monitorables that will shape India’s infrastructure trajectory towards Viksit Bharat 2047. It highlights that the emphasis has shifted from isolated projects to integrated infrastructure ecosystems, where multimodal connectivity, logistics efficiency, energy security, sustainability and citizen convenience are planned together. Union Government capital expenditure on key infrastructure sectors stood at nearly Rs 38 trillion from FY22 to FY26, while the Union Budget 2026-27 earmarked Rs 12.20 trillion for capital expenditure, equivalent to 3.1% of GDP.

Revati Kasture, Executive Director, CareEdge Ratings said, “As the country progresses through Amrit Kaal towards the vision of Viksit Bharat 2047, infrastructure is no longer seen merely as a driver of economic activity, but as a critical foundation for sustainable, inclusive, and resilient growth. The Viksit Bharat agenda envisages a developed India by the centenary of Independence, underpinned by stronger economic capabilities, social advancement, environmental stewardship, and effective governance. Achieving this vision will require continued investments in high-quality infrastructure across transport, energy, urban development, logistics, and digital ecosystems, while ensuring that growth remains financially sustainable and future-ready.”

CareEdge Ratings’ view on key infrastructure sectors

Sachin Gupta, ED and CRO, CareEdge Ratings said, “The journey to Viksit Bharat 2047 will be shaped by India’s ability to build infrastructure that is future-ready, resilient, and inclusive. As the economy expands, the focus must extend beyond asset creation to developing productive, liveable cities; efficient multimodal transport networks; green, reliable energy systems; globally competitive logistics ecosystems; and digitally enabled public infrastructure. The next generation of infrastructure must balance growth with sustainability, leverage technology to enhance efficiency, attract long-term capital, and remain resilient to evolving climate and economic challenges.”

Energy security moves to the centre of infrastructure planning

CareEdge Ratings believes India’s power sector is moving from a capacity addition challenge to an integration challenge. With non-fossil sources accounting for around 50% of installed capacity but only around 29% of electricity generation, energy storage, transmission and flexible generation will become critical to integrating rising renewable capacity. India’s storage requirement is expected to reach around 411 GWh by FY32, compared with operational storage capacity of around 54 GWh as of June 2026.

CareEdge Ratings estimates storage-related capex of over Rs 4 lakh crore to meet FY32 requirements, with standalone storage-based tenders rising to around 21 GW in FY26 from 7 GW in FY25. The report also highlights the complementary roles of Battery Energy Storage Systems (BESS) and Pumped Storage Plants (PSPs).

At the same time, CareEdge Ratings views coal-based thermal power as entering a multi-year phase of improved credit stability and renewed investment relevance. Well-contracted coal-based thermal assets are likely to remain critical for meeting growing demand while providing the flexibility required to integrate increasing renewable capacity.

The transmission sector is also poised for significant investment, with a capex outlay of around Rs 5.19 lakh crore during FY27-FY31. While execution challenges related to right-of-way, forest clearances and coordination remain key monitorables, the stable cash flow profile and long concession tenures of operational assets continue to provide resilience to the sector’s credit profile.

 Solar manufacturing shifts from capacity creation to integration

CareEdge Ratings expects India’s solar manufacturing sector to transition from rapid capacity creation towards a phase where backward integration, cost competitiveness and export orientation determine long-term success. Domestic module manufacturing capacity has reached around 210 GWp as of July 2026, while annual module demand is estimated at around 70 GWp.

The resulting potential oversupply in modules, coupled with continued constraints in cells, wafers and polysilicon, could pressure utilisation and profitability, particularly for non-integrated manufacturers. Integrated manufacturers with cell, wafer and polysilicon capabilities are better positioned to manage cost volatility and competition.

Digital infrastructure and smart metering emerge as strategic assets

CareEdge Ratings views smart metering not merely as a billing infrastructure upgrade but as foundational digital infrastructure for India’s energy transition and a strategic imperative for long-term energy security. With around 6.5 crore smart meters installed as of April 2026, accelerating prepaid activation remains critical to realising the programme’s financial and operational benefits.

India’s data centre sector is also entering a capex super cycle, with capacity expected to increase to around 7-8 GW over FY27-FY31 from around 1.5 GW of co-location capacity in 2026. The rapid adoption of AI is driving investments in AI-compatible facilities with higher power density, efficient cooling and advanced computing infrastructure.

Transportation infrastructure shifts towards efficiency and monetisation

CareEdge Ratings maintains a Stable outlook on the roads sector, with India entering a more selective and execution-intensive phase after a decade of significant network expansion. More than half of the NH-HAM portfolio is operational and continues to generate resilient annuity cash flows, supporting cash flow visibility, diversification and asset monetisation.

In ports, the focus is shifting from capacity creation towards effective capacity utilisation, cargo generation, productivity enhancement and first-mile-last-mile connectivity. Port capacity has doubled from 1,400 MMT in 2014 to 2,818 MMT in 2026, while average vessel turnaround time at major ports has declined from around 96 hours in FY14 to 48.8 hours in FY26.

CareEdge Ratings expects the credit profile of Indian private airports to remain stable over the medium term, supported by regulatory tariff revisions, capacity augmentation, expansion of non-aeronautical income streams, healthy operating cash flows and long concession periods.