India’s construction and real estate industry sits at an awkward crossroads. On one hand, record investment, rapid urbanisation and a swelling PropTech market are creating irresistible incentives to digitise; on the other, the day-to-day reality …
India’s construction and real estate industry sits at an awkward crossroads. On one hand, record investment, rapid urbanisation and a swelling PropTech market are creating irresistible incentives to digitise; on the other, the day-to-day reality on most sites still looks, smells and behaves very much like the past. The result: a lagging technology uptake that’s costly, risky and crucially avoidable.
Where we stand today
India’s PropTech market reached an estimated USD 1.2 billion in 2024 and analysts expect healthy growth through the decade, a signal that digital services for property discovery, management and transactions are gaining traction.
At the construction-execution end, industry analysts and vendor reports note a measurable but uneven move to digital tools such as BIM, drones, IoT sensors and digital project management. Autodesk’s industry work on digital adoption shows the sector is growing fast and that many firms have started pilot programmes and platform investments. Yet broad, integrated adoption is far from universal.
Institutional capital is flowing into Indian real estate (institutional investments were reported at ~USD 8.9 billion in 2024), which should make technology investments easier to finance for professionally run projects but infusion of capital alone hasn’t translated to consistent tech rollout on most sites.
The “available technology” and how it’s being used
Here’s a quick sweep of technologies that exist and are proven in other markets:
- Building Information Modeling (BIM) digital twins for design, clash detection and quantities.
- Modular & prefabrication systems factory-made components for faster on-site assembly.
- Drones & photogrammetry for site surveys, progress tracking and safety monitoring.
- IoT sensors & telematics for concrete curing, equipment health, productivity and asset tracking.
- Project management & ERP platforms for schedules, costs and supply-chain visibility.
- AI and analytics for risk modelling, predictive maintenance and demand forecasting.
- PropTech stacks from listing platforms and virtual tours to smart building management and tenant apps.
All of these are present in India in pockets marquee infrastructure and large commercial projects often use BIM, top developers are trialling prefab and a swathe of startups are building PropTech solutions. But the phrase “available” is doing a lot of heavy lifting: very few firms use the full potential of these tools across the project lifecycle.
Why utilisation is low the real constraints
Multiple, interacting reasons explain the low utilisation:
- Fragmented value chain and contracting model. Construction in India is highly fragmented: multiple contractors, sub-contractors and informal labour make standardised digital processes hard to enforce. Clients and contractors still often chase lowest tender price rather than integrated delivery, disincentivising investment in non-billable digital enablers.
- Mindset and capability gap. Many stakeholders view tech as an optional “luxury” rather than a productivity enabler. There’s also a shortage of digitally literate supervisors and site staff who can operate and maintain new systems; training is weak or absent.
- Upfront cost vs. diffuse benefits. Tools like BIM and factory-built components need upfront CAPEX and process changes; benefits (fewer reworks, faster handovers) are distributed across stakeholders which makes payback calculations and contracting awkward.
- Regulatory and standards gaps. Without widespread mandates or standards (for example, compulsory BIM for projects above a threshold), adoption is uneven. Public policy can accelerate uptake but has been patchy.
- Data & integration friction. Different vendors, proprietary formats and poor interoperability mean pilots rarely scale to enterprise-wide systems.
- Supply-chain realities. Small fabricators and MSME suppliers who form the backbone of India’s construction materials ecosystem are only beginning to go digital, limiting integration possibilities. (Contrast this with payments and banking where UPI/ APIs led to explosive adoption across merchant classes.)
How India compares with other sectors
If you look at banking and payments, digital penetration is deep: UPI dominates retail payments, digital account opening and e-banking are mainstream driven by interoperable standards, regulation and clear customer benefit. PwC and industry bodies report exponential growth in digital payments and broad adoption across merchant segments. Construction lacks comparable open standards and incentives.
MSMEs elsewhere have shown that when platforms combine clear value with low friction, adoption follows fast a lesson construction can borrow for materials suppliers and trades.
A realistic roadmap to better utilisation (for developers, contractors, policymakers)
- Mandate baseline digital standards for large projects. Require a minimum level of digital modelling (e.g., a BIM L2 equivalent) and digital handover on projects above a threshold. Mandates create demand for skills and standardise outputs.
- Rewire contracts to share value from digitisation. Introduce contract clauses that recognise investments in digital tools and share the gains (reduced rework, faster handover) for example, gain-share mechanisms, or bonus/penalty for schedule adherence informed by digital measurement.
- Invest in scalable, on-the-job training. Upskill supervisors and foremen with short, intensive digital courses and blended learning. Focus on tools that deliver immediate site value (mobile progress reporting, digitised checklists, QR tracking).
- Build interoperable tech ecosystems. Encourage the use of open data formats and APIs so BIM, ERP, drone imagery and finance platforms exchange information; support government or industry “sandboxes” to pilot integration across vendors.
- Finance modular factories and logistics. Promote cluster-based prefab factories (shared by local developers) and offer concessional finance for capex that replaces labour cost or improves build speed — this also reduces site congestion and improves quality.
- Create digital MSME uplift programmes. Subsidise onboarding of key supply-chain players onto simple digital platforms (materials e-invoicing, delivery tracking), similar to how payments platforms targeted small merchants.
- Promote data-driven decision governance. Move from opinion-based to evidence-based site management: weekly dashboards, quality dashboards, digital NCR tracking and root-cause analytics.
Closing: convert pilots into practice
The tools and capital exist; the market for PropTech and smart construction is expanding. But India will realise the productivity, safety and environmental gains only when technology ceases to be an isolated pilot and becomes a governed, contracted and financed part of how projects are delivered.
If India can replicate the interoperability, regulatory clarity and bottom-up merchant uptake that transformed payments and banking, construction will no longer be the sector that “could” digitise it will be the sector that did. The policy levers, contract innovations and training programmes exist; what’s needed now is the collective will to move from discrete pilots to system-level adoption. The prize faster delivery, lower cost, better quality and safer sites is simply too big to ignore.