India’s Infrastructure Boom: KPMG Highlights Key Challenges and Opportunities

A recent KPMG report predicts that India is on the cusp of launching one of the most extensive infrastructure programs of the 21st century. The report emphasizes that securing both foreign and domestic capital through innovative financial structures and streamlined investment processes will be critical to the initiative’s success.

This analysis is set against the backdrop of India’s emergence as the fastest-growing major economy globally, fueled by substantial government investment in large-scale projects across highways, seaports, airports, and railways.

The ‘KPMG 2024 Infrastructure and Transport CEO Outlook’ report, which surveyed 120 industry leaders from around the world, suggests that CEOs in the infrastructure and transportation sectors are optimistic about business growth over the next three years, expecting increases in both earnings and workforce numbers. According to the findings, 63% of these CEOs anticipate revenue growth exceeding 2.5% during this period, though they express concerns about the potential impacts of generative AI, other emerging technologies, global economic conditions, and the competition for skilled talent.

The report also reveals that 57% of infrastructure and transportation CEOs globally believe that stakeholder expectations concerning Environment, Social, and Governance (ESG) are evolving faster than their organizations can adjust strategies to keep pace. Furthermore, over half of the CEOs are worried that inadequate global efforts in climate-change adaptation could significantly affect their growth in the near to mid-term.

Manish Aggarwal, KPMG in India’s co-head of deal advisory and head of Infrastructure, Disinvestments, and Special Situations, noted that the urgency to integrate emerging technologies, like generative AI, has become a top priority for CEOs within the sector. According to Aggarwal, industry leaders have voiced concerns over talent shortages, the complexities of technology adoption, and the risks of not meeting Net Zero commitments. They highlighted how shifting stakeholder expectations and navigating intricate technological landscapes are significant challenges.

Despite these hurdles, the KPMG report also underscores a sense of determination and proactive engagement among CEOs. They are heavily investing in enhancing AI capabilities and technical skills, prioritizing workforce development, and focusing on nurturing talent. Building public trust has become a key objective, with companies more committed than ever to fostering confidence among stakeholders.

The 10th edition of KPMG’s CEO Outlook gathered insights from 1,325 CEOs between July 25-29, 2024. All participants lead companies with annual revenues of over $500 million, and one-third of those companies generate more than $10 billion annually. The survey included CEOs from 11 major markets—Australia, Canada, China, France, Germany, India, Italy, Japan, Spain, the UK, and the USA—and spanned 11 key industry sectors.

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