Indian Infrastructure Arbitration At A Crossroads: NHAI's Withdrawal & The Impeding Fallout

Indian Infrastructure Arbitration at a Crossroads: NHAI's Withdrawal & the Impeding Fallout

1. Introduction 

India has promised at the highest levels of government to make itself a premier place for international arbitration during the previous ten years. From various amendments to the Arbitration and Conciliation Act, 1996 to the establishment of institutional arbitration centres, India appeared to be prioritising arbitration as a method of resolving disputes.1 However, in this context, the National Highways Authority of India's ("NHAI") January 2026 circular, which limits arbitration for highway contract disputes over ₹10 crore, marks a concerning change.2

This paper delves into the recent regulatory changes that have gradually limited arbitration in public procurement, with a special emphasis on NHAI's directive. It is argued that the reasons behind these actions are based on incomplete evidence, wrongly identifies arbitration as the cause of systemic problems, and could