India has emerged as the world’s second-largest contributor to global construction growth between 2020 and 2030, accounting for 14.1% of total expansion — behind only China’s 26.1% and ahead of the United States at 11.1%, according to the State of the Project Economy 2026 report published by Foundamental, a Berlin-based venture capital firm focused on architecture, engineering and construction technology.
Together, India and China account for nearly 40% of all global construction growth over the decade, with capital expenditure increasingly concentrated among five nations: India, China, the United States, Germany and France.
Global construction spending reached $15.97 trillion in 2024 and is projected to climb to $19.86 trillion by 2028, reflecting a compound annual growth rate of 5.6%. Within that figure, infrastructure is the fastest-growing major segment globally, expanding at a CAGR of 5.1% between 2020 and 2025. India’s infrastructure market is forecast to outpace the global average significantly, growing at roughly 8% annually through the end of the decade.
Foundamental attributes India’s rising share to a convergence of factors: an aggressive national infrastructure agenda, rapid urbanisation, manufacturing-led economic expansion, and growing investment in logistics, transportation and energy networks spanning highways, railways, airports, ports, industrial corridors and urban transit systems. The firm characterises India’s trajectory as that of a maturing project economy — one increasingly defined by discrete, time-bound projects across infrastructure, energy, real estate and manufacturing rather than routine business activity.
The report identifies five structural forces reshaping the global project economy over the coming years. The first is re-industrialisation: as manufacturing reshores to the United States and Europe, each announcement translates into a construction project before it becomes a factory. The second is the rapid build-out of data centre infrastructure, which the report expects to double by 2030 versus 2018 levels and potentially add between 10% and 15% to the overall global construction market, driven by artificial intelligence and cloud computing demand. For India specifically, the report points to AI adoption, digital public infrastructure, cloud expansion, financial services digitisation and data-localisation requirements as additional accelerants.
The third structural driver is energy infrastructure. The surge in data centre and electrification demand is outpacing grid capacity — the United States alone may need power equivalent to 35 nuclear plants, while Europe is committing approximately €1.4 trillion to transmission and distribution upgrades. India is expected to require substantial investment across renewable energy, grid modernisation, battery storage and green-hydrogen infrastructure over the next decade. The fourth driver is civil infrastructure — roads, rail, transit, ports and water systems — which sits at the core of the fastest-growing construction segment globally. The fifth is a defence-infrastructure super-cycle, where the less-discussed opportunity lies in construction and maintenance of military assets rather than in weapons procurement, with spending characterised as structural rather than cyclical.
Foundamental’s broader conclusion is that India is positioned to benefit simultaneously from multiple long-term growth tailwinds — infrastructure expansion, industrial development, the energy transition, digital transformation and urbanisation — making it one of the most consequential contributors to global construction activity through 2030 and into the following decade.
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