India’s Infrastructure Investment Trusts (InvITs) are projected to expand from $73 billion in FY2025 to $258 billion by 2030, driven by institutional investments, infrastructure focus, and policy enhancements.
Overview of India’s Growing InvIT Market
- Total assets under management (AUM) of InvITs expected to grow 3.5 times by 2030.
- India emerging as a key player in the InvIT and REIT market in Asia.
- Rapid growth supported by substantial infrastructure spending and investor engagement.
What Are InvITs and Their Significance
Infrastructure Investment Trusts (InvITs) are investment tools that attract long-term capital for projects like highways, power transmission, and renewable energy. They offer opportunities for retail and institutional investors to invest in infrastructure assets and receive regular returns, contributing to bridging India’s infrastructure financing gap.
Growth Drivers of India’s InvIT Market
- Increased institutional participation, including sovereign wealth funds and global pension funds.
- Rising domestic contributions from insurance and pension funds.
- Higher capital allocations from public and private sectors, especially in transport, logistics, and energy infrastructure.
- Growing awareness among retail investors.
- Favorable policy environment with regulatory reforms promoting transparency and returns.
The Role of Government Spending
- Central government capex surged from $12 billion in FY2015 to $75 billion in FY2025.
- Infrastructure spending as a share of GDP increased from 0.6% to 2.0%.
- Strong fiscal push creating a solid foundation for InvITs to flourish.
InvITs and India’s Economic Growth Goal
India aims to achieve a $7 trillion economy by 2030, and infrastructure development is key to this vision. InvITs are crucial in attracting significant domestic and global investments necessary to reach the $7 trillion target.
Key Takeaways for Competitive Exams
- Understanding the growth potential and significance of InvITs in India’s infrastructure development.
- Recognizing the drivers behind the exponential expansion of India’s InvIT market.
- Appreciating the role of government spending and policy reforms in shaping the future of InvITs.
