Summary

The Indian construction industry grew at a CAGR of 13.93% for the period 2003-2008. Non-residential sector's market share was 84.7% in 2008, while residential sector accounted for the balance 15.3%. The Indian economy is one of the fastest growing economies of the world. One of the primary drivers in the five year plan is to ensure that the economy maintains a growth rate of 8.0%-9.0%, which is a substantial investment in infrastructure. In 2008, the Indian construction industry is US$102.9 billion and has grown by a CAGR of 13.92% from 2003 through 2008. The construction sector comprises 65.0% of the total infrastructure investment in India and accounts for nearly 11.0% of GDP. India's GDP growth rate has averaged over 8.5% in the last three years up from an average of around 6% during the 1990s. This economic growth has generated demand for property to help meet the needs of business for expansion, warehouses, hotels and retail shopping centers. It has also boosted housing demand as upper class families seek upgraded accommodation. In addition to this, shrinking household size and improved access to housing finance have boosted the demand for residential property.

Tax incentives has also been granted to interest and principal paid on home loans which has made owner-occupied property more attractive. The residential segment comprises 15.3% and non-residential 84.7% of the total construction market. These break-ups have remained broadly constant since 1993-1994. The real estate market has seen tremendous growth over the last 5 years. Many foreign players have entered the country through investments and joint ventures with Indian firms. Some of them include Jones Lang LaSalle (JLL), the world's leading integrated global real estate services and money management firm; Dubai-based DAMAC Properties and Nakheel; UAE-based real estate company Rakeen; and Merrill Lynch & Co; and Hines of the US. Some of the major drivers that have driven the Indian construction industry are:

*Urban Land (Ceiling and Regulation) Act, 1976 (ULCRA) repealed by increasingly larger number of states
*Enactment of Special Economic Zones Act
*Foreign investment regulations in terms of minimum capital investment for wholly-owned subsidiaries and joint ventures at US$15 million and US$4.2million respectively followed by full repatriation of original investment after three years
*In the retail sector, 51 per cent FDI allowed in single brand retail outlets and 100 per cent in cash and carry through the automatic route.
*100 per cent FDI allowed in realty projects through the automatic route.
*In case of integrated townships, the minimum area to be developed has been brought down to 10 hectares from 40 hectares.

Table of Contents

India Construction Market Analysis
India Construction Competitive Landscape
Leading India Construction Companies
India Construction Market Forecast
Appendix