Annual toll revisions on newer highway projects are expected to climb to 6.2–6.4%

The increase is coming despite slower growth in highway use.

Motorists and logistics companies should brace for a much bigger increase in the cost of using India’s national highways from April 2027. Annual toll revisions on newer projects are expected to climb to 6.2–6.4 per cent from 3.4–4 per cent this year, while older highways could see charges rise 4.5–5.5 per cent, according to the latest industry estimates.The increase is coming despite slower growth in highway use. Traffic is projected to grow 4–5 per cent in FY28, down from 4.5–5.5 per cent in FY27 and 6 per cent in FY26. Yet toll collections are expected to move in the opposite direction, accelerating to 10–12 per cent growth in FY28 from 7–9 per cent this year.“Traffic growth on national highways is expected to moderate to 4.5–5.5 per cent in 2026–27 from 6 per cent in 2025–26, while toll rate increases are estimated at 3.4–4 per cent. This is expected to limit toll collection growth in the current fiscal,” said Suprio Banerjee, Vice President and Co-Group Head, Corporate Ratings, ICRA.That divergence captures the coming toll squeeze: fewer incremental vehicles will be joining India’s highways, but motorists and freight operators will be paying substantially more for each journey.The bigger toll bill is being baked in months before motorists reach the plaza. Higher wholesale inflation during FY27 will flow into next year’s tariffs through the inflation-indexation formula built into highway concessions, potentially nearly doubling the annual increase on newer projects even as growth in the number of vehicles using national highways slows.How today’s inflation becomes tomorrow’s tollHighway concession agreements link annual toll revisions to the Wholesale Price Index (WPI), but the benchmark differs depending on when projects were awarded.“However, the expected movement in WPI inflation, amid the ongoing crisis in West Asia, is likely to support higher toll rate revisions in 2027–28,” Banerjee said.For newer projects, tariff revisions are linked to December WPI. ICRA expects December 2026 WPI inflation to reach 8–8.5 per cent, which is projected to translate into a 6.2–6.4 per cent toll-rate increase in FY28, compared with 3.4–4 per cent in the current year.Older projects are linked to March WPI. With March 2027 inflation projected at 4.5–5.5 per cent, toll rates on those stretches could increase by 4.5–5.5 per cent.The lag means motorists will continue to feel the impact of this year’s inflation after it has worked its way through the toll-setting formula.Freight feels the pinchFor truck and logistics operators, the increase will add another recurring expense to moving goods between factories, warehouses, ports and markets. Unlike an occasional highway journey by a passenger vehicle, commercial vehicles can cross multiple toll plazas on a single long-distance trip, magnifying the impact of each tariff revision.How much eventually reaches consumers will depend on the ability of transporters and logistics companies to pass higher toll costs through to customers and freight rates.Published on September 1, 2026