India’s water-treatment market shifts toward O&M spending

India’s Drinking Water and Waste Water Treatment Market is forecast to shift toward operations and maintenance (O&M) spending as major construction schemes are scheduled to conclude by FY26. India’s water-treatment market projects O&M spending to grow at a 16.0% compound annual growth rate (CAGR), from Rs 17.0 thousand crore in FY25 to Rs 35.6 thousand crore in FY30F.

Why is India’s water-treatment market shifting toward O&M?

India’s water-treatment market is shifting toward O&M because commissioned water and wastewater assets will require recurring operation, maintenance and compliance services after implementation. Capital expenditure (CAPEX) covers construction of plants and infrastructure, while operational expenditure (OPEX) covers their recurring upkeep. Engineering, procurement and construction (EPC) is the CAPEX-led commercial segment, whereas O&M reflects OPEX-led services for operating treatment plants, pipelines and associated assets.

The expected change follows an EPC-led construction cycle between FY20 and FY25. EPC represented 80% of India’s water-treatment market in FY20 and 83% in FY25, supported by large project rollouts under Jal Jeevan Mission and AMRUT 2.0. The report states that these schemes are scheduled to conclude by FY26, providing the basis for greater post-implementation O&M spending on completed infrastructure.

How large will EPC and O&M spending be by FY30F?

India’s water-treatment market is projected to reach Rs 169.6 thousand crore in FY30F, compared with Rs 99.9 thousand crore in FY25. The FY25-to-FY30F forecast implies an 11.2% CAGR, compared with the 10.6% CAGR recorded when the market increased from Rs 60.5 thousand crore in FY20 to Rs 99.9 thousand crore in FY25.

EPC is projected to remain the larger commercial segment through FY30F, while O&M grows faster. EPC spending is forecast to rise from Rs 82.9 thousand crore in FY25 to Rs 134.0 thousand crore in FY30F at a 10.1% CAGR. O&M is projected to increase from Rs 17.0 thousand crore to Rs 35.6 thousand crore over the same period at a 16.0% CAGR.

The spending mix quantifies the projected transition. O&M is forecast to rise from 17% of India’s water-treatment market in FY25 to 21% in FY30F, a four-percentage-point increase. EPC would account for the remaining 79% in FY30F, down from 83% in FY25, while retaining the larger Rs 134.0 thousand crore spending base.

What keeps EPC spending larger than O&M?

EPC remains larger because India’s water-treatment market includes extensive civil, distribution and electromechanical construction. The market covers drinking-water treatment plants, wastewater and sewage treatment plants, distribution networks, pumping stations and related works. Distribution networks include pipelines, overhead tanks and reservoirs, which require upfront construction expenditure before operating contracts begin.

Sewage and water piping was the largest plant-type segment in FY25, representing 33.0% of the Rs 99.9 thousand crore market, or Rs 33.0 thousand crore. It is projected to reach Rs 50.0 thousand crore in FY30F at an 8.7% CAGR. Continued expansion of water distribution and sewerage networks therefore supports EPC demand even as this segment’s share of the total market moderates.

Drinking-water treatment plants accounted for 28.0% of FY25 market value and are forecast to reach Rs 49.2 thousand crore by FY30F at an 11.9% CAGR. Effluent treatment plants accounted for 18.5%, or Rs 18.5 thousand crore, in FY25 and are projected to reach Rs 32.2 thousand crore at an 11.8% CAGR. The report links these categories to rural water programmes, urban water needs, industrial wastewater volumes and compliance requirements.

Which assets and policies could support O&M growth?

The O&M transition depends on a larger installed base of treatment and supporting assets requiring lifecycle services. Associated infrastructure, defined as pump houses, reservoirs, pipelines and control rooms, is projected to grow from Rs 5.0 thousand crore in FY25 to Rs 10.2 thousand crore in FY30F. Its 15.3% CAGR is the highest among the listed plant categories, reflecting the report’s focus on integrated systems and lifecycle efficiency.

Digital systems can support the operating requirement for those assets. Supervisory Control and Data Acquisition (SCADA) systems centralise monitoring and control through servers, databases, alarms and operator interfaces. The report identifies advanced treatment technology, digital O&M platforms and private participation in design-build-operate contracts as O&M drivers, alongside compliance enforced by the Central Pollution Control Board and State Pollution Control Boards.

The 16.0% O&M forecast therefore requires completed assets to move into continuing service arrangements after FY26. It also relies on wastewater-reuse policies under the National Mission for Clean Ganga and the National Water Policy, as well as the continued expansion of Swachh Bharat Mission 2.0 and sanitation programmes cited in the market outlook.

How concentrated is demand among public-sector customers?

Public-sector customers accounted for 80% of India’s water-treatment market in FY25, equal to Rs 79.9 thousand crore of the Rs 99.9 thousand crore total. This public segment includes municipal drinking-water infrastructure, sewage treatment plants, and water and sewage piping. The report links its funding to programmes including Jal Jeevan Mission, AMRUT and Smart Cities.

The public segment is forecast to grow at an 11.6% CAGR to Rs 138.2 thousand crore in FY30F. By comparison, the private and industrial segment represented 20% of FY25 market value, or Rs 20.0 thousand crore, and is projected to grow at a 9.4% CAGR to Rs 31.4 thousand crore. Private and industrial demand includes effluent treatment plants, selected associated infrastructure, and private sewage and water distribution projects.

Conclusion

India’s water-treatment market is projected to remain EPC-led in absolute spending through FY30F, while its mix moves toward O&M. Total market value is forecast to increase by Rs 69.7 thousand crore from FY25 to FY30F, and O&M’s 16.0% CAGR exceeds the 10.1% projected for EPC, lifting O&M’s share from 17% to 21%.

The next measure to watch is whether assets associated with schemes scheduled to conclude by FY26 enter sustained operating contracts. The forecast also depends on the public segment, which accounted for 80% of FY25 market value, and on the stated drivers of reuse policy, industrial compliance, advanced treatment adoption and design-build-operate participation.