Amitabh Kant: Why REITs and InvITs may hold the key to India’s infrastructure leap over the decades ahead

None of this is possible without a modern physical ecosystem that delivers fast logistics, efficient energy, reliable transport and sustainable urbanization. All of these depend on large-scale capital investment in infrastructure, making its creation the fulcrum of India’s long-term economic transformation.

The next phase of growth will depend on how effectively we mobilize long-term capital and leverage innovative financing instruments. Among these, REITs (Real Estate Investment Trusts) and InvITs (Infrastructure Investment Trusts) stand out as models that channel investment into income-generating assets.

InvITs focus on infrastructure such as roads and power networks, while REITs focus on commercial real estate—helping unlock capital, support new development and broaden investor participation.

The vision of Viksit Bharat requires a financing architecture capable of supporting large-scale infrastructure for logistics, power, transport, digital connectivity and urban utilities. REITs and InvITs provide a structured and scalable pathway to mobilize this capital. Globally, REITs and InvITs form a $3 trillion market led by the US, Germany, and Japan. India has the scale to lead this market. It is already among the world’s leading infrastructure investment destinations, but must be bolder and more ambitious.

India currently has 27 registered InvITs across nine sectors with assets under management of ₹7 trillion, which is minuscule compared to its potential. We should target $1 trillion or ₹90 trillion. This requires urgency and discipline, beginning with overcoming challenges that slow us down.

The first challenge is valuation. Over-optimistic assumptions and uneven portfolios can reduce the attractiveness of these trusts. . Fiscal pressures led sponsors to front-load trusts with physical assets without clarity on future expenditure or stability, weakening confidence. Such assets going into REITs and InvITs must rest on realistic assumptions, operational clarity and transparent long-range planning.

The second barrier is the public sector gap. Of the 27 InvITs in India, only two are public-sector sponsored, even though about 70% of infrastructure is built by public entities. Railways and warehousing could readily monetize or unitize their asset bases. While some entities have scaled their InvITs, others have not added assets fast enough.

Thirdly, in some cases, public sector entities retained operational control after forming InvITs, limiting independent price discovery and diluting governance. When the buyer and seller are controlled by the same sponsor, investor confidence weakens. Once assets move into a REIT or InvIT, trust management must be fully independent with professional rather than public-sector investment managers.

The fourth challenge is the absence of a predictable pipeline. Though the National Monetisation Pipeline articulates intent, actual transfers of assets into InvIT-like structures remains limited. The shortage is not of capital, but of prepared assets and efficient structures.

To move forward, we need a clear agenda.

First, determine sectoral contributions to trusts and create multiyear pipelines immediately. The targets are $250 billion worth of assets from power transmission and renewables, $200 billion from roads, $150 billion from logistics and digital infrastructure, $200 billion from urban utilities and metro systems and $200 billion from commercial real estate and brownfield portfolios.

Second, ministries should focus on preparing pipelines, resolving approvals and ensuring clean structures, rather than influencing commercial decisions. Investors will invest only if platforms are run professionally and transparently.

Third, states must adopt unified, time-bound asset monetization frameworks. Municipal bodies should pool revenue-generating urban assets such as bus terminals, metro systems, water treatment plants, parking facilities and commercial markets into city-level REITs and InvITs, allowing cities to raise long-term capital without adding debt.

Fourth, India must commit to a stable tax and regulatory roadmap for REITs and InvITs, while avoiding retrospective changes. Reliable currency hedging mechanisms are critical to attract global institutional investors and unlock larger pools of long-horizon foreign capital.

Fifth, India must move from one-off transactions to a platform strategy by creating large sectoral REITs and InvITs with recurrent asset infusions and the scale required for global indexing. This will build long-term confidence and create vehicles for sustained growth.

Sixth, domestic participation must expand. Today, foreign investors account for over 50% of institutional investments in InvITs, while domestic institutions such as mutual funds, pension funds, banks and insurers contribute only 7%. India should raise this to the 20-25% range, while retail participation near 5% has room to grow.

Seventh, India must ensure a large, predictable multiyear asset pipeline, especially from the public sector, so that capital can flow into ready platforms, supporting growth and investor confidence.

The message is clear. India can become the world’s top REIT and InvIT market, but only if ministries and institutions act with urgency. India’s 21st century story will be defined by the infrastructure it builds and the confidence it inspires. The world is ready to invest. We must seize this opportunity.

These are the author’s personal views.

The author is former CEO, Niti Aayog and India’s former G20 Sherpa.