Construction Disputes: The Hidden Cost of Building India's Infrastructure

India currently has 1,847 infrastructure projects worth ₹40.54 lakh crore underway, all tracked through the government's PAIMANA portal. As of June 2026, on projects above ₹150 crore alone, the cost overruns stood at ₹4.93 lakh crore. Some due to bad planning and a large part due to disputes. Disputes happen when contractors, owners, consultants and lenders disagree over money, time and responsibility, at any stage of a project: before work begins, while it's underway, or even after it's handed over. And while these disagreements play out, the project pays the price.

This isn't a marginal problem. As per a Parliamentary Standing Committee on Transport report, contractors filed arbitration claims worth Rs 88,100 crore against NHAI alone, India's highway authority, between 2017 and 2022, against which NHAI counter-claimed roughly Rs 39,221 crore. In the same window, as per a report, only Rs 6,101 crore of claims worth Rs 16,733 crore were actually settled. The rest stayed locked up, sometimes for years, while the highways they were fought over waited to be finished. The scale hasn't shrunk. According to a 2026 Lexology report, NHAI has already defended over Rs 8,375 crore in claims across just two arbitrations this year alone.

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