Inside India’s infrastructure revolution
Narendra Modi’s government has spent more than a decade attempting one of the most ambitious economic transformations in modern history. From freight rail and green energy to manufacturing and maritime trade, India is betting big on infrastructure-led growth – and the world is starting to take notice. Selwyn Parker reports
July 24, 2026
When a container is hoisted ashore at Jawaharlal Nehru Port in India, it is placed aboard a high-capacity freight train running from Mumbai to the industrial cities of Dadri and Khurja in Uttar Pradesh 1,500 kilometres away. The container is lifted off a day later, much faster than in many other countries, including America.
Even more impressive, the entire high-speed route is now electrified, with the final sections hooked up in January 2026 in a pivotal moment for India. Before electrification, the container would have taken three to four days. Not only did this last connection complete the country’s longest rail freight link, known as the Western Dedicated Freight Corridor, it gave India one of the longest electrified rail systems in the world. India has electrified 100 percent of its network, which is right up there with Switzerland, one of the jewels of railroads.
By comparison, the UK can claim 37 percent rail electrification and America just one percent. The rapidity of electrification is astonishing – during the last six years Indian Railways was adding over 15 kilometres every single day. The result is that today India boasts no less than 70,000 kilometres of electrified broad-gauge rail that is part of a grand plan to modernise all its vital systems – transport, energy and shipping – under the government of Prime Minister Narendra Modi. This remarkable achievement symbolises a continuing economic rejuvenation that has largely escaped the world’s attention.
Modinomics
Since Modi won power in 2014 after decades of socialist governments, these policies were dubbed ‘Modinomics,’ mostly by critics who said they weren’t working – or at least not as well as was promised. Supporters however said reform was long overdue in a country notoriously difficult to govern.
Demonetisation gave a massive boost to cashless payments
With 28 sprawling states and eight territories spread over a vast area, India is the seventh biggest country in the world in terms of geography and one of the most culturally diverse. And with a population of 1.47 billion, it is the most populous. “Significant hurdles persist, including entrenched bureaucracy, social fragmentation, and deep-seated political divisions,” notes an article in Springer Nature that summarises the challenges of reform.
One of those significant hurdles was the labour market. When Modi introduced radical changes to employment laws in 2014 that were designed to weaken obstructive union power and boost the creation of jobs, nearly 150 million workers in banking, manufacturing and construction immediately went on strike for 24 hours at a cost of $3.5bn to the economy. Even rickshaw drivers stayed at home in sympathy. Yet the reforms are seeing results. According to Australia’s Treasury, the economy forged ahead at an annual rate of between 6.5 and seven percent during Modi’s first 10 years in power – that is, to 2024 – and “maintained its position among the world’s fastest-growing major economies despite a significant contraction in 2020 due to the pandemic.” Most analysts including the International Monetary Fund predict a rosy longer-term outlook with a similar growth rate persisting all the way through to 2035.
However, in a nation of volatile politics, Modi continues to attract his fair share of criticism for making changes, however overdue they may have been. And one of the most overdue was what is known as ‘the demonetisation of the currency.’ With just a few hours’ notice, on November 8, 2016, the 500 and 1,000-rupee bank notes were replaced in a move to put a stop to the long-running practice of ‘black money’ – cash used for illicit activities that had escaped the tax net and was being used to fuel terrorism, among other purposes. The demonetisation was comprehensive, covering 86 percent of the currency.
But did it work? Some economists say it didn’t because the action caused serious economic disruption for a few months, but others point to the long-running damage caused by the existence of this parallel economy. As Bhaskar Chakravorti, Dean of Global Business at The Fletcher School at Tufts University wrote for the Brooking Institute a year later, only one percent of Indians had been declaring their earnings for tax purposes.
But suddenly, the money ended up back in the system: “When the policy change was announced, people were given until December 30, 2016, to return 500 and 1,000 rupee notes to banks, or else risk losing the value of them. Banks were estimated to have received 14.97 trillion rupees ($220bn) by the deadline, or 97 percent of the 15.4 trillion rupees’ worth of currency demonetised.
Also, as other economists explain, demonetisation gave a massive boost to cashless payments such as Paytm’s mobile wallet business and, more importantly for the long run, in the intervening years the tax base has widened. The government followed up by overhauling a confusing system of local consumption taxes with the introduction of a centralised goods and services tax.
Grandiose goals
The Modi government sometimes shoots itself in the foot by setting sky-high goals and making what the critics describe as ‘grandiose claims.’ For instance, a key reform is ‘Make in India,’ a strategy intended to turn the country into a manufacturing powerhouse by, among other measures, encouraging foreign investment and technology. Unveiled in 2014, the targets were unrealistically high – a doubling of manufacturing’s growth rate, the addition of 100 million jobs in the sector by 2022, and a 25 percent share for manufacturing in gross domestic product by the same year. As it happens, there has been a decline in the sector’s share of GDP and only a small growth in employment.
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Part of the blame can be attached to India’s outdated manufacturing structure. Nearly three quarters of manufacturers employ less than five paid staff. And they are historically highly unproductive. It is widely accepted that these small enterprises put out less than 20 percent of the volume of products of larger Indian manufacturers and way less than similarly sized factories in western nations, especially the US.
Red tape is a big part of a historic productivity problem. With regards to India’s economic bottenecks the IMF states, “Many of these enterprises remain small for decades due to complex compliance requirements, rigid labour regulations and product market rules that discourage growth. Easing these constraints would help businesses expand and, in turn, dramatically lift productivity.”
However, there is no magic wand and Modinomics constantly runs into impasses. “While employment in the manufacturing sector has grown, the ‘Make in India’ push has not resulted in manufacturing outpacing other sectors of the economy in employment generation,” notes an article in The Print, an independent news platform. “Another priority area for the initiative was to boost exports and cut down on imports. The data over the last 10 years revealed the programme has failed to do the former but
