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Construction Insights June 2023: India

26 June 2023
The construction industry in India, which primarily includes real estate and urban development, is expected to reach $1.4 Trillion by the end of 2025. 

The significant growth is largely attributable to the Indian Government’s initiatives, such as the Union Budget 2023 which provides an outlay of INR 10 Lakh Crore (approximately USD 120 Billion) to the construction industry, an increased outlay in the PM Awas Yojana (a Central Government’s scheme targeting construction of about 20 million houses at affordable prices), and the Smart City Mission. 

However, the construction industry has failed to realise its true potential and growth due to its adherence to old and traditional methods. A recent report titled 'Digital Transformation: The Future of Connected Construction' by International Data Corporation (IDC) highlighted that the lack of digital transformation in the Indian construction industry presents challenges to its growth. Some key challenges include project delays, budget overruns, difficulties in enterprise resource planning, project management, and scheduling. The execution of a project begins on-site, where the workforce is responsible for the construction work.

However, coordination between decision makers, project owners, contractors, and on-site workers is often laborious, disorganized, and time-consuming. The lack of effective site management and communication between field and office workers leads to delays, cost overruns and a decrease in stakeholders' confidence.

It is crucial for the Indian construction industry to embrace digital transformation, which will unlock its true potential. When discussing digitization in the construction industry, key effective tools include Building Information Modelling (BIM) and robotics and automation (R&A). BIM involves the comprehensive process of creating and managing information for a built asset. Through an intelligent model and cloud platform, BIM integrates structured, multi-disciplinary data to produce a digital representation of an asset throughout its lifecycle, from planning and design to construction and operations.

Similarly, the use of R&A has significantly enhanced the performance of the construction industry through state-of-the-art infrastructure such as drones, autonomous vehicles, exoskeletons, on-site automated and robotic systems, and off-site prefabrication systems.

It is high time for the Indian construction industry to embrace digital transformation, as it will promote operational excellence, improved customer engagement, effective risk management, timely project completion within budget, enhanced workspace safety and overall support the infrastructure growth of the Indian economy.

For further information contact: Bomi Daruwala, Partner, Vaish Law - India

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