A project passes through four decision points between announcement and operation. In Indian infrastructure, the point at which commercial risk is actually assessed has moved, and the legal work has not moved with it.
Private-sector project announcements in India more than doubled over the three years to FY26, rising from approximately INR 56 trillion in FY21–FY23 to INR 104 trillion in FY24-FY26. Across power, IT-enabled services, data centers, electronics, and steel, approximately 55 per cent of private-sector capex was directed during FY24-FY26, up from 45 per cent in FY21-FY23. The combined share for renewable energy, conventional power, and digital infrastructure rose from 25 per cent to 38 per cent.
It is a strong period and the Reserve Bank of India’s September 2026 Bulletin reads it that way, reporting investment intentions rising to INR 5.6 lakh crore across 1,839 projects in FY26, up from INR 5 lakh crore across 1,581 projects in FY25.
The board commitment
Over broadly the same period, private capital formation as a share of GDP slipped from 10.9 per cent in FY23 to 10.3 per cent in FY25. A National Institute of Public Finance and Policy brief published in August 2026, Navigating India’s Private Capex, highlights that expanding project announcements are no longer translating into completed operational assets.
Both metrics are authoritative: the RBI measures forward-looking investment intent, whereas NIPFP measures actual capital conversion.
Following the West Asia conflict, private investment announcements dropped 56 per cent year-on-year in March 2026. There is a decent indication here of where project risk is being evaluated.
It is not being evaluated at the permitting stage. Historically, governance bottlenecks in Indian infrastructure centered on domestic regulatory approvals, fuel linkage, and land acquisition. Those domestic constraints have substantially eased. Nor is it liquidity: incremental industrial bank credit expanded by INR 6 lakh crore in FY26, the highest annual expansion recorded between FY14 and FY26. Capital is available.
What is being evaluated is commercial risk originating outside India, at board level, before financial close.
The contracts
In many transactions, project approval is granted based on optimistic commercial assumptions regarding input costs and supply chains. The project contracts designed to carry those assumptions are negotiated downstream.
A regulatory bottleneck is resolved through administrative navigation including statutory filings, agency representations, and managing procedural timelines. A commercial risk bottleneck requires contractual allocation: establishing which party absorbs input price volatility, how long-term offtake is secured, how force majeure and change-in-law provisions handle external shocks, and what triggers contract termination and compensation.
These exercises require different capabilities and occur at different stages of the deal lifecycle. Permitting and regulatory execution remains necessary for baseline compliance, but no longer serves as the primary differentiator for whether a project reaches financial close.
The sectors concentrating the capital each carry structural exposures originating outside India. Renewables depend heavily on imported solar cells and modules, exposing project economics to trade remedy duties, domestic content rules, and foreign supply disruptions. Data centers and electronics depend on specialised hardware subject to export controls in manufacturing jurisdictions, such as the US, alongside complex long-term power purchase mechanics. Steel and heavy manufacturing face coking coal import dependency, raw material price swings, and trade remedy actions in both directions.
None of these vulnerabilities can be resolved through an Indian regulatory clearance. Each must be allocated contractually across cross-border supply chains between parties operating in different legal jurisdictions. Input-side trade exposure, tariffs, and foreign export controls must be audited before long-term supply agreements are signed, which places trade remedies work inside project finance.
Financial close, or not
Where those contracts cannot absorb external volatility, the project does not fail but never starts.
The evidence that this is now the binding constraint sits in project distress data: the total value of distressed projects fell from a peak of INR 3.3 trillion in FY14 to INR 14,000 crore by the end of FY26. Projects that reach financial close and commencement now overwhelmingly perform. The regulatory ecosystem has become efficient at filtering out projects whose underlying commercial risks cannot be contractually allocated.
The current constraint is therefore non-commencement, and non-commencement is close to invisible. A project that stalls prior to capital deployment leaves term sheets, draft agreements, and lapsed approvals, but leaves no record of the commercial reason why it failed to proceed.
Operation, and eventually disputes
For the projects that do proceed, dispute resolution represents a lagging indicator. Litigation and arbitration arrive years later, usually tracing back to ambiguous risk allocations accepted at the outset.
By that point, the decisive choice is years in the past taken by whoever authorised the investment at the outset.The decisive legal and advisory work occurs in the window between public announcement and final capital commitment, which is the one stage in this sequence where most law firms are not yet instructed.
Lawfinity Solutions advises international law firms on cross-border legal market positioning. If the India corridor is a live question for your firm, we would be interested in a conversation. Lawfinity works with one firm per jurisdiction. Engagements begin with a single conversation about your firm’s current position and where the corridor question is live for you. Write to Prachi Shrivastava
