The Indian Housing Project, which entails a commitment to construct 60,000 houses, is a flagship grant project of India in Sri Lanka. A total grant of approximately ₹1,835 crore has been committed for this initiative. It is one of the key projects of its kind undertaken by the Government of India abroad.

• The first pilot phase (Phase-I) involved the construction of 1,000 houses in the Northern Province was completed in July 2012. Later, an MOU with the Government of Sri Lanka on the modalities of implementation of the 49,000 houses under the Project was signed on 17 January 2012. 
• The second phase (Phase-II) involved construction of 45,000 houses across the Northern and Eastern Provinces was completed in December 2018. It was implemented under a novel 'owner-driven model,' wherein the beneficiaries themselves undertook the construction or repair of their houses, while the Government of India provided technical assistance and financial support.
• The third phase (Phase-III) involved the construction of remaining 4,000 houses for estate workers in the Central and Uva Provinces using a new, community-based approach. A Letter of Exchange regarding this phase was signed with the Government of Sri Lanka in April 2016, and work commenced in October 2016. During the visit of Vice President of India to Sri Lanka in April 2026, the last tranche of houses under this phase were handed over to the beneficiaries thereby marking the successful completion of this Phase. 
• The fourth phase (Phase-IV): During his visit to Sri Lanka in May 2017, Prime Minister of India Narendra Modi announced the construction of an additional 10,000 houses for estate workers in plantation areas, and the agreement was formalized in August 2018. This phase entails an additional commitment of LKR 11 billion. Out of total commitment of 10,000 houses, construction of 1,300 houses has commenced under the Stage 1 of this phase and is expected to be completed soon. The pre-construction activities for another 4,700 houses to be built under Stage 2 are in their final stages, and construction work on these houses will begin shortly.