The Indian Infrastructure Boom

I have just completed an 11-day long trip to India. A sojourn that saw me visit Chennai, Coimbatore, Pune, Mumbai, Ahmedabad, and Bangalore.

As ever, the country and its ebullient people leave one inspired. And with the elections now over, Indians have reflected on the result and in the main seem happy with the outcome.

Indians understand that, when all is said and done, it is mainly foreigners who fret over who occupies South Block in New Delhi.

Corporate India marches at its own pace and succeeds (or fails) despite who is in power. Indian corporate triumph is all about execution and good management. You can either be an Indigo or a Vistara, using an aviation example. Both were dealt with the same regulatory, labor, and infrastructure hand. One thrives, and the other comes to ever more mimic Air India, as time marches on.

The most striking observation for me was the transformation underway in India’s infrastructure. In each of these cities, the scale of the construction work on roads and new metro train lines is palpable.

Though it creates inconvenience, the outcomes of this infrastructure boom are truly amazing.

I have now used the new Worli-Marine Drive coastal road to and from Nariman Point on multiple occasions. Both the commute and the city have been transformed. The Great (90-minute) Trek on Friday afternoons from Nariman Point to Mahalaxmi is now a historical remnant. A mythic tale to tell one's child. I find that I now need to rethink and re-learn Mumbai's traffic patterns.

Lest anyone is concerned, BKC has (temporarily) taken up the role relinquished by Peddar Road.

I have already written about the Atul Setu Bridge, which has transformed the Mumbai-Pune commute.

This trip was the first time I landed at and departed from the new Terminal 2 at Bangalore Airport. Neither I nor Chat GPT have worthy superlatives. What I found fascinating is that this aesthetically pleasing feat of design and architecture reflects an infrastructure that is modern and yet rooted. It is the Kannada version of Chhatrapati Shivaji Maharaj International Airport.

India has found its voice.

Another example of the "Indian way" of building is the Vande Bharat train. I was impressed by the journey from Mumbai to Ahmedabad and the train coaches. Though not quite Deutsche Bahn, the train does the trick for India.

And as India builds more infrastructure it also gets better at doing so.

There are also manifold secondary effects: what smarter people call externalities.

The capex investment is good for the wider economy and Indian companies. L&T's most recent quarterly results and order book tell the tale of the infrastructure boom.

Seeing the miles of poured concrete in each of the six cities I visited, I could not help but wish I was a regional or national cement manufacturer, a steel maker, or a building equipment manufacturer.

Cement consumption is rising, as is capacity creation. A study notes that “between 2012 and 2023, the installed cement production capacity grew by 61 percent to 570 MT from 353 MT.“ The capacity of the Indian cement industry will expand at a compounded annual rate of 4-5% till 2029. India is on track for an annual capacity of 720 metric tons.

Jobs are being created.

Better infrastructure and logistics make Indian manufacturing and exporters more competitive.

More jobs will be created.

The costs and ease of domestic commerce also improve. Companies operating from Tier-two and Tier-three India can compete regionally and nationally.

Domestic travel (for business and leisure) is on the up and service sectors, like aviation and tourism will flourish. Tier-two and Tier-three India are driving the Indian hospitality boom.

Yet more jobs.

There is also an important demonstration effect. India is improving and Indians feel proud. Every person I interacted with at Bangalore Airport was visibly proud. The firangis are certainly taking note.

To paraphrase Lenin, there were many decades when not enough happened in Indian infrastructure. In recent years the Indian government has made a lot happen.

This infrastructure boom will unleash many other Indian transformations.