India’s infrastructure challenge shifts from raising capital to making projects investable, says Deloitte

New Delhi: India’s infrastructure development is facing a new constraint: attracting private capital is becoming as much about making projects investable and execution-ready as it is about mobilising money, according to Deloitte’s Future of Infrastructure Survey 2026.

Among Indian respondents, 42% cited complex policies, regulations and permissions as barriers to infrastructure delivery, while 38% pointed to a lack of private sector participation and another 38% to budgetary constraints.

The findings underscore the need for stronger project preparation, clearer revenue models and financing structures that allocate risk to those best placed to manage it, Deloitte said.

“India’s infrastructure opportunity is multi-decadal, but seasoned investors view it as two distinct tranches separated by risk. The public sector has helped reduce risk and attract private investment in greenfield sectors such as renewables and highways. However, similar mechanisms are yet to emerge at scale in urban infrastructure,” said Manish Aggarwal, national leader – Infrastructure & Capital Projects, Deloitte South Asia.

“At the same time, private capital is increasingly participating in brownfield assets through asset recycling, M&A, InvITs and listings. The monetization of de-risked assets is a sign of the Indian market’s growing maturity, helping to recycle capital into new infrastructure development. M&A is playing a key role in this process, connecting brownfield monetization with new greenfield development and helping sustain India’s investment cycle. As deal sizes expand, supported by deeper capital pools and relaxation of acquisition financing norms, investors will need to focus on unlocking embedded value and generating alpha post-acquisition,” Aggarwal said.

Funding broadens

Indian respondents said they expect infrastructure financing to diversify as priorities expand across digital networks, clean energy, transportation, water and social infrastructure.

Some 71% expect greater use of vendor and supplier financing, 62% anticipate more multilateral and development-bank funding, and 58% expect increased participation from sovereign wealth and pension funds. The findings point to greater demand for blended capital combining public funding with long-term institutional money, Deloitte said.

India’s hybrid annuity model (HAM) shows how government support and risk-sharing can improve project bankability and attract private capital, the survey said. By balancing public- and private-sector risks and funding 40% of construction costs, the model has helped create more investable infrastructure opportunities.

A-Pac is also emerging as a global infrastructure innovation hub, with 80% of respondents expecting greater integration of digital technologies across public and social infrastructure and 86% identifying data infrastructure as a priority investment area.

India shows stronger expectations in several areas: 93% of respondents expect increased investment in cybersecurity, 80% in public Wi-Fi, 77% in alternative energy such as solar, wind and geothermal, and 82% in freight rail and mass transit.

AI becomes infrastructure

Some 71% of Indian respondents say the public sector needs to modernize infrastructure and integrate digital engineering technologies, compared with 36% across A-Pac. Another 83% say public and critical infrastructure needs stronger protection from cyberattacks, versus 63% across A-Pac.

Some 91% expect advanced technologies including generative artificial intelligence (GenAI), digital twins and predictive analytics to significantly affect infrastructure and transportation operations, compared with 57% across APAC. Half say AI will revolutionise infrastructure planning and operations, while another 50% say digital twins and real-time analytics are essential to improving asset performance and predictive maintenance.

“Technology is becoming the connective tissue across infrastructure systems. Indian leaders are moving beyond viewing AI as a standalone technology and are beginning to see it as an operating layer for infrastructure planning, financing, delivery and operations. Governments will need to combine AI, digital twins, cybersecurity and real-time analytics to improve project delivery, strengthen resilience and make more informed investment decisions. The next generation of infrastructure will be defined by physical assets and the intelligence embedded within them,” said NSN Murty, Government & Public Services Consulting Leader, Deloitte South Asia.

Organisations are already preparing: 79% are developing AI training programmes, 62% are building AI vision and implementation roadmaps, and 54% are improving data quality for AI adoption. Infrastructure organisations are using AI for predictive maintenance, cyber and physical security, energy demand forecasting and real-time asset monitoring.

For India, the findings suggest that sustaining infrastructure investment will depend on building investable project pipelines, adopting financing models suited to different risks and using technology to improve delivery and operations.

Deloitte’s Future of Infrastructure Survey 2026 surveyed 985 infrastructure executives across government, private-sector and not-for-profit organisations in 21 countries, covering digital infrastructure, energy and utilities, mobility and transportation, and social infrastructure. India’s findings are based on 24 respondents and are benchmarked against APAC.