India’s Highway Awards Stall, Threatening The Next Road Buildout

By Amritha Pillay

What?

An integral part of India’s road economy seems to be losing momentum — new highway projects are being awarded at a slower pace.

The slowdown has persisted for two to three years. 

For the current financial year, the industry had hoped for a pickup, with estimates pointing to as much as 8,000 kilometres of new highway works being awarded by March 2027. 

The first three months, however, have offered little evidence of a turnaround.

Industry executives and analysts believe that the weakness is temporary, though there is a disagreement over its cause. Some see it as a structural trend as government agencies wait to resolve land acquisition and environmental clearance issues before putting projects out to tender. 

One of India’s largest infrastructure platform companies, IRB Infrastructure Developers, said on a recent analyst call that it had not bagged any new order “because there was no award activity during the quarter”.

Others in the industry have confirmed the slowdown too.

“The pace of awards in the first quarter has been slower than expected,” Anand Kulkarni, director for Crisil Ratings, told The Core. He noted that NHAI has set a highway-awarding target of more than 5,000 kilometres for FY2027, compared with actual awarding of around 3,500 kilometres over FY2024-FY2026 on average. 

Why? 

The reasons include land acquisition, statutory clearances and permissions, utility shifting, encroachment removal, law-and-order issues, poor performance by contractors or concessionaires, and force majeure events such as the Covid-19 pandemic.

Suprio Banerjee, vice president and co-group head at ICRA Ltd, attributed the sluggishness to “the Ministry’s focus on addressing land acquisition issues and environmental clearances before awarding projects”.

Kulkarni from Crisil describes the slowdown as “largely structural, reflecting the ministry's deliberate shift towards awarding projects only after substantial land acquisition and key approvals have been secured. This approach is intended to improve execution timelines, reduce project risks and enhance cost efficiency”.

Why It Matters 

Commercial vehicle sales are expected to grow 4% to 6% in the current financial year, albeit at a slower pace because of a high base. Toll revenue is also expected to rise 2% to 4%, even after the West Asia conflict weighed on industrial activity, following growth of more than 10% in FY26.

The mismatch is a problem. Road developers are now turning to state projects and other infrastructure segments to offset weaker highway orders, while delays in adding capacity risk worsening congestion. 

And the longer projects take to reach execution, the greater the inflation-driven cost of building them.

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$1.5 billion

This is how much Air India, India's national carrier, is seeking in fresh equity from owners Tata Sons and Singapore Airlines, months after the airline posted a record annual loss, Reuters reported sources as saying. The funding request is still under discussion, with no final decision taken.

Context: Air India and its budget arm Air India Express posted combined losses of $2.33 billion in the year ended March, more than double the previous year. The losses have also weighed on Singapore Airlines’ profits as Air India undertakes a multi-billion-dollar turnaround, including refurbishing its existing fleet.

The Ask: Reuters reported one of the sources as saying that Air India wants the funds immediately, though the infusion is likely to come in tranches. Singapore Airlines would need to contribute its share for the investment to proceed. The airline is seeking the money as fresh equity, rather than debt, the report said.

Gig Work Is the Future

Will the future of work belong to gig workers? Yes, according to Saurabh Mukherjea, wealth manager and founder of Marcellus Investment Managers, who said gig work is here for all of us.

Speaking at The Core's event in Mumbai, Mukherjea pointed out that those being laid off from large conventional IT services firms are moving to smaller towns and taking up gig work, powered by global marketplaces that connect businesses with independent professionals and freelancers.

The Context: Payoffs for knowledge economy gig workers will be similar to Wimbledon payoffs, where the winner takes home several times more than the first-round loser, said Mukherjea. Similarly, in gig work, there will be years of good payouts followed by years of weak payoffs, as the structure will be volatile.

Your performance as a gig worker will be on daily display on such marketplaces; your daily ranking against your peer set, friends, family and rivals will be visible to everybody, every day.

What Next? So while gig work will allow job seekers to work longer, it is also likely to pose a set of financial and psychological demands that may not yet be fully understood or absorbed.

Early retirement may be out of the window, as most people may have to work till the age of 70, unlike today.

India Becomes ‘Outcast’

The US has sanctioned four India-based companies—Portease Partners LLP, Sadashiva Overseas Ltd, PP Softtech Pvt Ltd and Prakrutees Infra Impex Pvt Ltd—over their alleged involvement in importing or facilitating trade in Iranian petroleum and petrochemical products.

The Lead: The action comes as Washington steps up economic pressure on Tehran as the US-Iran war enters its sixth month. US Treasury Secretary Scott Bessent announced ‘Operation Economic Outcast’, an expanded campaign to sever Iran’s economic lifelines and isolate it from the global financial system. Washington has also warned countries and businesses that continue to do business with Tehran that they could face secondary sanctions.

Origin: According to the US State Department, Sadashiva Overseas imported about $69 million worth of Iranian-origin petroleum products. PP Softtech and Prakrutees Infra each imported about $25 million. Portease Partners, an India-based customs broker, facilitated multiple shipments of Iranian petrochemical products, the State Department said. The four companies were designated for knowingly engaging in significant transactions involving Iranian petroleum products.

India's Mobile Phone Push Delayed

India set an ambitious target in 2022, aiming to reach $126 billion in mobile phone production by 2025-26, with $52-58 billion coming from exports. But this goal will now take five more years to achieve, Business Standard reported.

Catch Up Quick: The industry managed only $70 billion in production and $29 billion in exports in FY26, with Apple alone making up 68% of those exports. Back in 2023, the target was already lowered to $100 billion because of weak demand at home, higher taxes on phones, and Chinese brands not exporting as much as promised.

What’s Next: Now, with a new government scheme in place, industry experts expect production to reach $110-120 billion and exports to hit $60 billion by 2030-31. But this depends on how soon phone sales recover, since they're expected to drop 14% in 2026-27 due to costlier memory chips.

Tractor Demand Growth Cools

Wholesale tractor volume growth is likely to moderate to 1-4% in FY2027, following a robust 23.5% rise in FY2026, as a high base effect and a below-normal monsoon forecast weigh on the industry, according to an ICRA report.

The India Meteorological Department has forecast below-normal rainfall for 2026 due to El Niño, though the deficit has narrowed sharply from around 30% in June to about 12% by mid-August, aiding reservoir levels.

Setup: However, tractor demand remained strong in July 2026, with wholesale volumes up 20.1% year-on-year and retail volumes rising 28.3%, aided by a low base, steady farm cash flows, and improved affordability after the GST rate cut on tractors.

The Lead: Tractor manufacturers are expected to maintain healthy margins and strong credit profiles through FY2027, backed by operating leverage, stable raw material costs, and adequate liquidity.

Raw Sugar, Real Pressure

The Centre has given importers two months from the date they file their Bill of Entry to refine duty-free imported raw sugar and sell it in India, replacing an earlier October 31 deadline. The government made the change after industry raised concerns that the original deadline was too tight.

Flashpoint: Sugar prices have surged as traders and bulk buyers stock up ahead of the August-November festive season. Industry officials have blamed speculative stocking for much of the recent rise. But the market also faces tighter supplies. Crisil estimates that sugar mills will end the 2026 sugar season with 3.9 million tonnes of stocks, 25% below last year and 40% below the five-year average. Crisil added that sugar production has fallen for two consecutive seasons, while mills have diverted more sugar toward ethanol.

Pivot: The government has rolled out several measures in the past week to cool prices. It allowed one million tonnes of raw sugar imports at zero duty on August 21, the first such move in nearly a decade. It also ordered bulk consumers to limit inventories to 15 days from September 1, down from 30 days.

The latest rule gives importers a rolling two-month window to refine and sell the imported sugar, while the October 31 deadline for bringing the raw sugar into India remains.

The Warning India Never Got

India's food safety regulator, FSSAI, abandoned a push for colour-coded front-of-pack warning labels in August after a tense March meeting with industry executives from companies including Coca-Cola and Nestle, Reuters reported, citing audio recordings reviewed for the first time.

How We Got Here: At the meeting, executives argued warning labels were confusing and ineffective even as both companies voluntarily use interpretive labels in European markets.

A can of Fanta sold in London has 63 calories. The same brand in India contains three times as much sugar.

An artificial dye in the Indian version of Fanta, which requires a prominent health warning in Europe, is noted only in small print on the back of the can in India.

Nearly 80% of India's packaged food and beverage products could be classified as high in fat, sugar or salt. FSSAI has been cracking down on a number of Indian companies like Dabur over false claims.

What’s Next: India's Supreme Court is now scrutinising the FSSAI's decision after a petition by health activists.

By 2050, 450 million Indians could be overweight or obese, according to a study in The Lancet. "Lobbying by interest groups has almost paralysed regulators," said Simone Pettigrew of the George Institute for Global Health, told Reuters.

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Operation Economic Outcast Is Not As Bad As Feared

On Episode 959 of The Core Report, financial journalist Govindraj Ethiraj talks to Ambareesh Baliga, Veteran Market Expert as well as Professor Prasanna Tantri, Associate Professor of Finance and the Executive Director of the Centre for Analytical Finance at the Indian School of Business (ISB).

• Operation Economic Outcast Is Not As Bad As Feared

• The US Sanctions Indian Trading Companies For Doing Business With Iran

• Govt To Transfer Its Conventional Missile Technologies To Private Sector To Hasten Production

• A Steady Flow Of IPOs Continues To Act As A Dampener On The Markets

• India Might Raise Close To $80 Billion Of FCNR (B) or NRI Deposits