India is set to construct a six-lane expressway that will connect Ludhiana in the state of Punjab with the capital Delhi, at an estimated cost of $200bn ($3.68bn).

The new 357km Delhi-Ludhiana Expressway, which is expected to reduce the distance between the two cities by almost 50km, has received approval from the states of Delhi, Punjab and Haryana. The route map for the new project will be finalised by February 2013.

India’s Road Transport and Highways Minister C P Joshi told reporters that the cost of the expressway per km will be around Rs400m ($7.3m), as well as Rs50bn ($919.3m) that will be invested on land acquisition.

The new expressway will start from outer Delhi and feature a 266km-long stretch that passes through the Sonipat, Safidon, Asandh, Kaithal districts in Haryana and Samana and Nabha districts in Punjab. It will also include a 91km-long node to ease connectivity to Chandigarh.

"The route map for the new project will be finalised by February 2013."

Joshi said that townships will be allowed develop alongside the expressway nodes and will be given exclusive connectivity to the new road.

"We would discuss the cross subsidy model from real estate for funding the project once the alignment is finalised," he added.

"We have also appointed PWD Secretaries of the three states as the nodal officers for the expressway project," the minister said.

The new expressway is one of the seven expressways announced by the government under the flagship highways building programme NHDP VI.

In October 2011, the government had granted approval for the construction of 1,000km of expressways in the country.