Introduction

India’s construction industry is worth an estimated US$650 billion by 2025 and contributes about 9% to its GDP, and is at a dramatically different point compared to countries with more developed or more intensive construction markets, such as GCC members, Europe, Singapore, etc. Most global leaders are large capital-intensive industries with a high degree of standardisation (safety systems) as well as prefabrication-based execution, while India remains highly dependent on cost-efficient and labour-intensive resources, domestic vendors, and the availability of affordable and qualified workers.

1. Standards, Regulation, and Contracting Frameworks

Indian construction projects are managed by the National Building Code (NBC) and Indian Standards (IS Codes) with varying levels of enforcement at both the State and Urban Local Body levels (ULB). However, while the NBC is increasingly aligned with international standards concerning seismic and fire safety design, there is still inconsistency in its implementation.  In contrast, all other global markets use uniform national building codes (Eurocodes and British Standards) as well as FIDIC contracts to ensure uniformity in the areas of thermal performance, corrosion resistance, lifecycle durability and dispute resolution processes.

As a direct result of this regulatory discrepancy, there is a significant difference in construction execution between India and all other countries. In India, there are frequent delays in obtaining approvals for construction projects, combined with the need for multiple revisions to the project design after the award of the project. Conversely, boththe  Gulf Cooperation Council (GCC) and Europe have fixed deadlines for completion of projects, the payment of penalties imposed based upon milestone achievements, and a consistent approach to risk management throughout the duration of each construction project.  However, the flexible nature of the Indian regulatory environment allows more rapid adjustments in costs due to changing economic conditions as well as greater opportunities for optimising local designs to meet the unique needs of price-sensitive markets. 

2. Technology Adoption: India Catching Up, Selectively

Technology adoption has increased in India recently, even though it remains inconsistent. The large infrastructure projects in India, such as metros, airports, highways, and industrial corridors, are adopting some form of new construction technologies, such as Building Information Modelling (BIM), as well as drone and AI-based project oversight to ensure quality and efficiency. The timeline for implementing BIM is typically only 1–2 months and is facilitated by the availability of a large pool of talented IT professionals and other resources, as well as widespread global software platforms.

In India, modular prefabrication offers the fastest path for scalable construction technology. Companies within India, including L&T, Tata Projects, and Nest-In, are already utilising factory-built modules for housing, industrial sheds, and metro components. The result of their work is that construction can be reduced by 30–50%. Still, prefabricated construction makes up only about 5% of all construction in India, compared to 70–90% in Singapore, Germany, and Sweden, which continue to enforce the use of DfMA (Design for Manufacturing and Assembly).

Furthermore, advanced automation, from robotics to 3D printing, is considered to be the mainstream alternative method of construction globally. These methods have been embraced in part due to the presence of federal policy-mandated clustering of manufacturing facilities and the growth of logistics networks. In India, these methods remain restricted to pilot projects because of capital expenses, inconsistent standards, and logistical issues in transporting prefab components from the factory to the construction site.

3. Labour Productivity and Skill Economics

The construction labour productivity in India significantly lags behind global benchmarks, with workers in India producing an estimated USD 5,000-7,000 worth of output annually, whereas workers in the US and Germany produce USD 70,000-100,000 worth of output. The productivity of Indian workers is roughly only 20-30% as productive as their counterparts in the OECD countries due to inefficient manual methods, a lack of proper skills for jobs, absenteeism from work, and inadequate safety procedures. It is estimated that at least 40-50% of the workforce in the construction sector in India is not qualified for the job they are doing, especially when it comes to using digital tools, mechanised equipment, and compliance with safety regulations.

In contrast, advanced economies allocate an average of 2-3% of their Gross Domestic Product (GDP) to vocational training and apprenticeship programs; as a result, they can create highly skilled, certified workforces. India has a particularly favourable labour cost position, which has enabled it to maintain a competitive position, but this advantage is being challenged by the growing demand for faster project delivery and a high level of quality in urban infrastructure projects.

4. Materials Economics: India’s Structural Cost Advantage

India’s most enduring advantage lies in its domestic materials ecosystem. Cement, steel, aggregates, and bricks are produced at scale and sourced locally at costs significantly lower than global peers.

In 2025, steel rebar prices in India averaged ₹46,000–₹65,000 per tonne, compared with $650–$850 per tonne (₹55,000–₹72,000) in GCC markets. Ready-mix concrete (RMC) costs in India averaged ₹4,500–₹6,500 per m³, while GCC cities such as Dubai and Riyadh recorded ₹10,000–₹14,000 per m³, reflecting a 40–60% premium driven by imported aggregates, energy costs, and heat-resistant specifications.

India’s advantage is reinforced by lower inland freight, proximity to raw materials, and integrated manufacturing hubs. GCC markets, despite low import tariffs, rely heavily on imported cement clinker, steel, and dredged or imported sand, raising baseline costs.

5. Landed Cost Analysis: Imports vs Domestic Sourcing

A landed-cost model shows import competitiveness is low with domestic sourcing in India, and import viability is reasonable in the GCC.

Steel Rebar (Per Tonne, 2025)

• India (Imported): FOB ₹48,000 + freight, duties, IGST, and handling add 20–35%, resulting in ₹65,000–₹80,000 landed.
• GCC (Imported): Higher base prices and logistics premiums push landed costs to $750–$1,000 per tonne.

Cement

Imported cement into India lands at ₹12,000–₹13,000 per tonne, versus ₹7,000–₹8,000 domestically, rendering imports largely unviable. In the GCC, cement lands at $110–$150 per tonne, making imports structurally necessary due to limited limestone reserves.

Aggregates and RMC Inputs

Aggregates cost ₹800–₹1,200 per tonne in India but ₹3,500–₹6,000 per tonne in the GCC. As a result, total RMC input costs in India average ₹2,100–₹2,800 per m³, compared with ₹5,500–₹7,500 per m³ in GCC markets—directly explaining the stark RMC price differential.

6. Safety and Sustainability: The Global Gap

India’s safety performance lags global standards due to decentralised enforcement under the BOCW Act and limited on-site audits. Globally, OSHA- or HSE-style independent regulators, mandatory PPE, heat-stress protocols, and digital safety monitoring are standard. Sustainability certifications such as LEED, Estidama, and Green Mark are embedded from the design stage internationally, while India’s GRIHA and LEED adoption remains concentrated in premium commercial projects.

Conclusions: Where India Stands and Where It Is Headed

India’s construction industry is not so inefficient as it has optimised for cost-sensitive, high-volume demand. Its advantages in domestic materials, labour availability, and supply-chain depth are structural and durable. However, these strengths are offset by low productivity, fragmented regulation, and uneven technology adoption.

While Global 'best-practice' methods are coming into India in a very selective manner through Building Information Modelling (BIM), modular prefabricated building systems, drone technology, and digital management techniques, full convergence of these methods will require India to establish regulatory harmonisation as well as skill certification requirements and incentives for industrialised construction. India's construction industry is not going to adopt a complete carbon copy of either the Gulf countries or European Market models, but rather develop its own hybrid model combining the use of global technology with India's local cost economic factors.

In the next ten years, the competition of India's construction industry will depend on a combination of more than just inexpensive materials and the ability to leverage the productivity-enhancing technologies, without reducing the cost advantages of operating in India—something that has not yet been achieved in many global construction markets.