How Rust Is Draining $180 Bn From Indian Economy Every Year

India loses an estimated 4.3% of its gross domestic product (GDP) to corrosion, amounting to approximately $180 billion annually.

The transport, power, telecom and infrastructure sectors are the most severely affected, according to a report by the Nomura Research Institute (NRI) titled 'Built to Last: Adopting Global Best Practices to Reduce Corrosion Losses in India's Infrastructure'.

This economic toll exceeds the global average GDP loss attributed to corrosion, which is 3.4%. Adopting effective corrosion-management practices could improve India's GDP by around 1.5%, translating into potential annual savings of nearly $63 billion.

The report argued that corrosion should be treated as an economic and policy issue rather than merely an engineering challenge.

These insights emerge as the country accelerates its financial commitments to public works, including housing, transport networks and green energy.

India's GDP reached around $4.2 trillion in FY26, supported by annual economic growth of 6-7% over the past decade. The government aims to become a $5 trillion economy in the near term and achieve a $30-40 trillion economy by 2047 under the Viksit Bharat vision.

Infrastructure Under Threat

The report identified infrastructure as one of the sectors most exposed to corrosion-related losses. Current engineering and procurement practices in India continue to place greater emphasis on upfront construction costs than on the long-term performance of assets.

Corrosion increases maintenance expenditure, shortens the service life of public assets and raises replacement costs. Rapid infrastructure expansion, urbanisation and manufacturing growth are increasing exposure to corrosion, raising maintenance costs and reducing asset life.

As India accelerates investment in roads, railways, urban infrastructure, renewable energy and housing, improving asset durability could significantly reduce long-term economic losses.

Power, Telecom, Railways

Beyond infrastructure, the report identified power, telecommunications and railways among the sectors most vulnerable to corrosion-related losses, reflecting their reliance on steel-intensive assets and extensive physical networks.

The power generation and transmission sector records the highest corrosion intensity, with losses estimated at 10.1% of sectoral GDP. Expanding renewable energy capacity, transmission lines and supporting infrastructure make stronger corrosion protection critical to improving asset life and reliability.

India has more than 813,000 telecom towers supporting 2.948 million base transceiver stations. While Indian standards require zinc coating for primary structural members, the report recommended extending corrosion protection to auxiliary components and adopting periodic inspection regimes to improve tower durability.

For Indian Railways, the report estimated annual corrosion-related losses at $3 billion and recommended moving beyond periodic repainting to long-life corrosion protection systems. Preventive maintenance and improved material selection could extend asset life and lower maintenance expenditure over time.

The report also covered buildings, roads, bridges and the automotive sector, arguing that engineering standards and maintenance practices need to evolve alongside India's expanding infrastructure base.

Key Policy Recommendations

The report outlined several recommendations to reduce these losses. It suggested adopting lifecycle cost analysis for public infrastructure projects instead of focusing primarily on upfront construction costs.

It recommended strengthening BIS standards by aligning them more closely with global engineering practices and incorporating exposure-based durability requirements.

The report also advised mandating stronger corrosion protection for steel-intensive sectors such as telecom, transport and public infrastructure. This includes introducing modern testing methods and improving inspection and maintenance protocols for long-life assets.

The report also promoted greater use of corrosion-resistant materials in sectors exposed to harsh environmental conditions, including renewable energy infrastructure.