India overtakes US to become second largest construction growth market globally

India has emerged as the world’s second-largest construction growth market, overtaking the United States and trailing only China, as the country’s infrastructure push, urbanisation and industrial expansion reshape the global project economy.

According to the latest State of the Project Economy 2026 report by Berlin-based venture capital firm Foundamental, India is expected to account for 14.1% of global construction growth by volume between 2020 and 2030, ahead of the United States’ 11.1% share and second only to China’s 26.1%. Together, India and China are projected to contribute nearly 40% of global construction growth over the decade.

The findings underscore India’s rising importance in an industry that is becoming increasingly central to economic growth and technological transformation.

Global construction spending

The report estimates that worldwide construction spending reached $15.97 trillion in 2024 and is projected to rise to $19.86 trillion by 2028, implying a compound annual growth rate (CAGR) of 5.6%.

As investment in physical and digital infrastructure accelerates, capital expenditure is becoming concentrated among a handful of countries. India, China, the United States, Germany and France are emerging as the key drivers of the global project economy.

Focus on infrastructure 

Infrastructure is the fastest-growing segment within construction globally, expanding at a CAGR of 5.1% between 2020 and 2025. India’s infrastructure market is expected to grow even faster, at around 8% annually through the decade, according to the report.

Large-scale investments in roads, railways, airports, logistics networks, metro systems and urban development projects are helping fuel the country’s rise. Rapid urbanisation and a manufacturing push are also contributing to higher construction activity.

“India accounts for the second-largest share of global construction growth by volume between 2020 and 2030, at 14.1%, behind only China and ahead of the United States,” said Shubhankar Bhattacharya, Co-Founder and General Partner at Foundamental.

AI and data centres

The report identifies five structural forces driving the next phase of the project economy: re-industrialisation, data centre construction, energy infrastructure, civil infrastructure and defence infrastructure.

Among these, the rise of artificial intelligence and cloud computing is expected to trigger a new construction cycle. Foundamental estimates that global data centre construction could double by 2030 compared with 2018 levels, adding between 10% and 15% to the overall construction market.

Energy infrastructure is also entering a major investment phase as rising electricity demand from AI applications and electrification drives spending on renewable energy, battery storage and transmission networks.

Long-term growth

Despite the rapid expansion, the report notes that construction productivity has improved by just 0.4% annually since 2000, highlighting the need for technologies that can improve efficiency and execution.

Foundamental believes India is uniquely positioned to benefit from multiple long-term trends—including infrastructure expansion, industrial development, digital transformation and the energy transition—making it one of the most influential contributors to global construction growth through 2030 and beyond.