New Delhi: India's highway construction and road building sector is set to slow down in 2026-27 due to the ongoing West Asia conflict, disrupting supplies of key inputs and driving up costs, according to industry experts.
The pace of national highway construction has declined to 23.74 km per day in 2025-26, down from 29.21 km/day in 2024-25 and 33.83 km/day in 2023-24, according to ratings agency CareEdge.
A shortage of bitumen, a key petroleum product used in road surfacing, is driving the slowdown, with contractors reporting a sharp mismatch between demand and supply.
Bitumen prices have risen 20–30% amid disrupted supply chains, and domestic bitumen production has stagnated at around 5 million tonnes even as consumption has risen to 8.74 million tonnes, creating a persistent deficit.
Overall input costs, including fuel, steel, and electricals, have risen 15–25%, and the aggregate impact on highway project economics is estimated at up to 8%.
The ministry of road transport and highways (MoRTH) is yet to come up with its yearly target, but has introduced an emergency cost escalation compensation mechanism to ease liquidity pressures.
