The National Highways Authority of India (NHAI) announced that it will award 54 highway and expressway projects covering 2,442 km this financial year, with a capital cost of Rs 1.80 lakh crore. This is a sharp fall from the 124 projects covering 6,376 km that were lined up for award in 2025-26, worth Rs 3,45,466 crore. The projects span states from Andhra Pradesh and Bihar to Punjab, Tamil Nadu and Telangana, and will be implemented through EPC, HAM and BOT models.
In the first two months of FY27, highway construction dropped 45% year‑on‑year, reaching only 740 km compared to 1,344 km and 1,288 km in the same period of FY26 and FY25 respectively, according to the PAIMANA dashboard. The slowdown reflects delays in land acquisition, statutory clearances, utility shifting and contractor performance.
Manish Sharma, partner at PwC India, says the main cause is a gap in project readiness and the impact of the West Asia conflict. He notes that highway projects involve many layers of work moving at different speeds, so a contractor may be fully mobilised on site but still unable to move resources across the full alignment.
The Middle‑East war has hit road construction in India by choking the supply of bitumen. Shipping disruptions delayed deliveries and pushed prices up sharply. In April‑June FY27 India imported 4.59 lakh tonnes of bitumen, down 45% from 8.36 lakh tonnes a year earlier.
The price of bulk VG‑40 bitumen at the Mathura refinery rose from Rs 48,892 a tonne on February 1 to Rs 82,122 a tonne by April 16. Since bituminous paving is the final stage of construction, a shortage can delay progress even when earthwork continues.
CareEdge Ratings forecasts that the pace of national highway construction will slip further to around 21-22 km a day in FY27, citing low award rates, execution challenges and the bitumen price shock. They expect a decline to about 25 km a day in FY26.
EY India’s Kuljit Singh points out that HAM payments and toll rates are linked to the Wholesale Price Index, which can help cushion projects from input cost spikes. An April notification tied EPC price adjustments to WPI and bitumen data.
Road transport minister Nitin Gadkari said in a parliamentary reply on July 23, 2026 that land acquisition delays, statutory clearances, utility shifting, encroachment removal and contractor performance are the recurring causes behind stalled projects.
A Ministry of Road Transport and Highways circular issued on June 5 allowed agencies to invoke force majeure between April 29 and June 30, providing relief to contractors hit by the supply squeeze.
Overall, road construction is caught between a deliberate government pullback in fresh awards and a supply‑side shock from bitumen shortages tied to the West Asia conflict. Analysts see this as a readiness problem rather than a demand problem, with recovery hinging on how quickly land acquisition, clearances and material supply normalise. NHAI’s tighter, more selective FY27 pipeline shows policymakers are prioritising execution certainty over sheer volume for now.