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A look at the construction industry in India


March 22, 2011
By Amritt Ventures

March 23, 2011 – India's construction industry contributes 5 percent of the nation's gross national product, and is growing approximately at 15-20 percent per year. Private sector investment in industry and housing, and government investment in India's infrastructure are the growth drivers.

March 23, 2011 – India's construction industry contributes 5 percent of the nation's
gross national product, and is growing approximately at 15-20 percent
per year. Private sector investment in industry and housing, and
government investment in India's infrastructure are the growth drivers.

The
Tenth Five Year Plan of the Government of India estimated a shortage of
22.4 million dwelling units. 

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Thus, 80 – 90 million housing units will
have to be constructed. The investment required for constructing these
and related infrastructure during this period will be $600 billion to
$800 billion at roughly $30 billion to $40 billion per year. The growth
trends in the retail, entertainment, information technology and business
process outsourcing sectors have corresponded to a growing demand for
shopping malls, multiplexes, food outlets, office spaces, convention and
business centers.

India requires new infrastructure investments
of USD one trillion, and there is still a gap of 25-30 percent that can
be filled by U.S. companies. The Indian market for construction
equipment and services has been growing steadily as projects continue to
be implemented in several infrastructure industries. This trend is
likely to continue as more and more projects get implemented. The most
promising areas of growth are power, oil & gas, ports, roads, civil
aviation, urban infrastructure, and housing.

The construction
industry in India has four broad segments: civil, infrastructure,
housing and industrial projects. The growing construction activity in
India is likely to produce increased imports for U.S. construction
equipment and services. Partnerships with foreign and U.S. firms will
continue to be sought by Indian architectural, engineering, and
construction firms for large-scale projects, either through joint
ventures or in consortia, in an effort to obtain highly needed expertise
to implement specialized contracts.

India's leading companies
and well-run government corporations have shown a marked preference for
U.S. construction services. Several projects such as transportation
bridges, refineries, and industrial plants executed by the many U.S.
companies operating in this market have become showcases for plant
design. Their level of expertise is raising the standard for project
design, construction, management, and supervision.

The potential
for Western firms lies in highly specialized contracts for designing,
developing industrial infrastructure, setting up training institutes,
and conducting construction supervision, areas in which local firms have
limited experience. In addition, there are opportunities to supply
construction services to India's chemical, electrical/electronic,
mechanical engineering and environmental sectors.

Amritt Ventures is a management consultancy firm advising American companies how to
increase revenues and reduce costs by leveraging the economies of China
and India.

For more information visit the website: www.amritt.com/marketing


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