A report by Nomura Research Institute indicates that adopting galvanised steel could cut India’s infrastructure maintenance costs by ₹49,580 crore annually. Although this material has higher initial costs, the potential for longer asset life could change how government projects are planned. Investors should watch for shifts in public procurement policies that move beyond the lowest-price bidding model.
India’s infrastructure sector loses approximately ₹1.42 lakh crore annually due to the corrosion of assets, a figure representing nearly 3% of the sector's contribution to GDP. A recent report by Nomura Research Institute Consulting & Solutions India highlights a potential path to mitigate these structural losses by transitioning toward the wider use of galvanised steel in major projects.
The Economics of Lifecycle Durability
The core of this proposal lies in shifting from traditional 'upfront pricing' to 'lifecycle economics.' Standard Thermo-Mechanically Treated (TMT) reinforcement bars typically offer a lifespan of 40 to 50 years. In contrast, galvanised variants can extend the durability of infrastructure beyond a century, even in harsh coastal environments where high chloride levels accelerate decay.
While the initial cost to procure galvanised materials is higher, the total cost of ownership—considering reduced repairs, maintenance, and delayed replacement—is significantly lower over the long term. This suggests that the current focus on the 'lowest bid' in project tenders may actually be costing the economy more over the lifespan of bridges, highways, and urban structures.
Challenges in Policy Adoption
Despite the long-term economic benefits, the transition faces structural hurdles. Many public and private infrastructure tenders in India are designed to award contracts to the lowest initial bidder, often called the 'L1' bidder. This practice encourages the use of cheaper materials to win contracts, even if those materials require more frequent and expensive maintenance down the road.
For the projected savings of ₹49,580 crore to materialize, government and industry regulators would need to revise procurement standards to prioritize total lifecycle performance rather than immediate capital outlay. International markets, including Japan and the United States, have already moved toward linking material requirements directly to environmental exposure, such as higher salt content or humidity, to ensure structural integrity.
What Investors Should Monitor
The potential adoption of these materials is not an overnight event. Investors monitoring the infrastructure, steel, and construction sectors should look for changes in national building codes, state-level procurement policies, and specific tender conditions that explicitly mandate corrosion-resistant materials.
If the government moves to align infrastructure spending with long-term asset life, demand for premium and treated steel products may rise. However, the pace of this change will depend on how quickly budgetary processes can accommodate higher upfront spending for lower long-term liability. Future updates on material standardization or new guidelines from the Ministry of Road Transport and Highways or urban development bodies will be the key indicators of whether this policy shift gains traction.