STEP AHEAD Towards New Goals

STEP AHEAD Towards New Goals

India is now the third-largest construction equipment market globally and aims to reach second largest soon. In order to achieve this, there is a pressing need to focus on domestic consumption, improved manufacturing of equipment and components, and a significant increase in exports. Construction Times presents the scenario.

India has become home to many global construction equipment players with their cutting-edge solutions fast tracking India’s infrastructure development. Many of them have established manufacturing facilities here to cater the regional and even global market needs. This has also encouraged some of the homegrown brands to expand in the global market. India is the third-largest market for construction equipment globally, after China and the US. As per ICEMA, Indian CE market is expected to reach $25 billion in FY2030 from around $10 billion in 2024. However, the journey will be challenging as the Chinese and the US markets are far ahead of India.

Market dynamics

The Indian construction equipment (CE) industry is currently experiencing a robust phase, fueled by strong infrastructure spending and ambitious development goals. According to ICEMA's latest report, the sector has recorded a remarkable 26% year-on-year growth, with 1.35 lakh units sold in FY 2024. India has many ongoing and planned infrastructure development projects, which includes roads, bridges, airports, metro systems, smart cities, railways, multimodal logistics parks etc. These projects are driving the demand for construction equipment. India’s infrastructure projects are scaling up quickly, thanks to initiatives like the National Infrastructure Pipeline (NIP) and Gati Shakti. These initiatives not only address urban needs but also spur development in rural regions, boosting demand across the CE sector.  

Government programs like the Pradhan Mantri Gram Sadak Yojana (PMGSY), Smart Cities Mission, and Bharat Mala have significantly increased demand for construction equipment across sectors. Segments such as excavators, backhoe loaders, motor graders, and compactors are seeing heightened activity due to their critical role in infrastructure development. Earthmoving equipment like backhoe loaders and excavators continues to dominate the market, driven by large-scale infrastructure projects. Road construction equipment, particularly asphalt pavers, road rollers, and milling machines, is also in high demand due to the government’s focus on highway expansion. Private sector involvement in real estate, industrial corridors, and renewable energy projects has further fuelled the growth of the CE market. The current scenario presents a prime opportunity for Indian CE manufacturers to innovate and contribute more strategically to the nation’s infrastructure goals.

V G Sakthikumar, Chairman & MD, Schwing Stetter India, adds, “Expanding infrastructure investments have a direct and significant impact on the consistent utilization of construction equipment. With mega projects in roads, railways, metros, and ports underway, the demand for efficient and reliable equipment is at an all-time high. Schwing Stetter India, with its comprehensive portfolio of concreting and construction machinery, ensures that project timelines are met with precision and productivity.”

The rise of the construction equipment rental market is also noteworthy. Many small and medium-sized enterprises are increasingly opting for rental equipment to avoid high capital costs and to ensure they have access to the latest, most efficient machines without the long-term financial burden.

“India’s rapid infrastructure growth, driven by expansion in construction and mining, continues to fuel demand for specialized vehicles that support efficient excavation and material transportation essential to these sectors. As the country’s largest commercial vehicle manufacturer, Tata Motors offers a robust product portfolio, including state-of-the-art tippers, and ready-mix concrete (RMC) transportation solutions—all engineered to deliver high productivity, low operating costs, and superior fuel efficiency across applications critical to aid India’s infrastructure development.  We have also showcased a range of alternate fuel powered tippers and tractors contributing to a greener tomorrow,” says Rajesh Kaul, Vice President & Business Head – Trucks, Tata Motors.

“The industry also faces challenges such as fluctuating raw material costs and a need for more skilled labour. Despite these hurdles, the market remains dynamic and promising, with increasing adoption of advanced technologies and sustainable practices to meet the evolving needs of modern infrastructure,” adds Prasanta Ganguly, Head – OTR Marketing (Domestic Sales), Balkrishna Industries Ltd.

Technology leads

Advancements in construction equipment technology, such as telematics, IoT integration, and automation, have improved efficiency and productivity in the construction sector. Sustainability plays a major role in today’s market scenario and construction equipment industry has taken up many measures to include environment friendly technologies to the construction equipment. There are high expectations from the construction equipment sector in enabling the Indian economy to become carbon neutral. In this a key role will be played by equipment operated on alternate fuels, use of alternate materials and measures to promote circular economy.

Currently, OEMs are working on development of construction equipment powered by alternate fuels such as hydrogen, CNG, methanol, bio-diesel and hybrid technologies to reduce emissions. Further, electrically powered CEVs have also been developed on fast track, by most of the OEMs. In line with this, Rajiv Chaturvedi, Vice President, HD Hyundai Construction Equipment India, adds, “HD Hyundai’s focus on fuel-efficient engines, advanced cooling systems, and auto-idle features results in significant savings on operational costs, especially for long-term projects. This is very important for our customer to keep a check on the project cost.”

“Beyond delivering reliable vehicles, Tata Motors’ commitment to ensuring high productivity and uptime includes comprehensive support through our extensive network of over 2,500 touchpoints and our flagship service program, Sampoorna Seva 2.0. This program provides holistic support, including breakdown assistance, guaranteed turnaround times, and easy access to Tata Genuine Parts, ensuring long-term value for our customers. Additionally, Tata Motors’ range of trucks is equipped with Fleet Edge, Tata Motors’ connected vehicle platform for efficient fleet management. As demand continues to evolve, we remain well-positioned to monitor the market, engage with stakeholders, and introduce new solutions at an opportune time,” highlights Kaul. 

Make-in-India push

The Make-in-India initiative has had a transformative impact on the manufacturing sector, driving substantial growth and innovation. It has been transformative for the construction equipment industry also, fostering local manufacturing, reducing import dependencies, and enhancing self-reliance. The CE manufacturing has come a long way from being largely imported in the 90s to a large part being manufactured locally to cater to the evolving customer requirements and tough local operating conditions. 

Dimitrov Krishnan, Managing Director, Volvo CE India, points out, “By localizing production, we can respond swiftly to market demands, ensuring that our equipment is tailored to meet the specific needs of Indian projects. This approach supports the growth of India’s construction and mining sectors, fostering technological advancements while aligning with broader economic goals.”

“For ACE, being a 100% Swadeshi company, Make-in-India is more than just a vision; it’s embedded in our core system & processes. We have been heavily investing in local talent, partnerships, and technologies to produce equipment that meets global standards right here in India,” asserts Manish Mathur, CEO – Cranes, Action Construction Equipment (ACE).

“From a strategic perspective, local manufacturing under Make in India can significantly streamline equipment availability. By reducing dependency on imports, we can ensure a more reliable and consistent supply chain for critical machinery, especially for large-scale infrastructure projects where timelines and quality control are key. Moreover, domestic production also addresses the specific need of Indian construction projects, which often require equipment to suit local conditions, terrain and work practices,” says SP Rajan, VP & Head – Competency Centre RBF SBG, L&T Construction. 

With volumes going up in line with the sustained growth of Indian infrastructure investment over the last two decades, increased cost efficiencies have been achieved through modern technologically advanced design and manufacturing processes to an extent that most of the Indian construction equipment are very competitive in the international market where they are specifically required.

Despite achieving minimum 80% indigenisation level in case of more than 50% of CE products, the Indian CE industry is heavily dependent on import of high precision components. The industry’s high technology products and precision components, which will drive future trends, involve high technology aggregates and systems such as hydraulics, electronic controls, pumps, drives, engines, powertrain, undercarriage items etc., which are largely being imported at present. These require considerable investment by the Indian manufacturers in the value chain to enable their domestic production. The CE industry’s endeavour to become a global sourcing hub is expected to generate sufficient demand to create the requisite scale for production of these components within India.

“Enhancing local manufacturing of components and aggregates in India is critically important for several reasons, particularly in the context of the rapidly evolving construction equipment industry. The construction sector is a cornerstone of India’s infrastructure development, and the growth of this sector heavily depends on the availability and affordability of high-quality components and aggregates,” says Anil Ghegade, Sr. Director, Danfoss India Innovation Center. There is a shift towards localized production of both equipment and components, which is not only improving supply chain resilience but also making the sector more competitive globally.

Focus on export market

Exports represent a significant growth opportunity for the Indian CE industry. India’s CE exports worth about USD 0.7 billion are currently less than 1% of global CE exports, which the industry plans to increase to USD 3 billion by 2030, according to ICEMA. Massive efforts are, therefore, underway to promote Indian CE exports.

“Several OEMs including Tata Hitachi manufacture and export a wide variety of construction equipment to the global markets ranging from the Middle East, Africa and SAARC Nations. However, several challenges remain from a rapid and unprecedented increase in input costs, supply side disruptions due to freight delays, high freight costs, vessel uncertainty induced by the pandemic as well as recent disruption from the Russia-Ukraine conflict,” says Siddharth Chaturvedi, General Manager - Marketing, Tata Hitachi.

Future – Aiming a new high

The Indian construction equipment industry has already been witnessing unprecedented growth in demand across all equipment segments, resulting in two back-to-back record-breaking annual results. Given that construction equipment comprises 15-20% of the average construction project cost, the rapidly growing construction sector is expected to drive demand for the CE industry’s products in the coming years, in existing as well as emerging segments.

“India’s path to becoming the world's second-largest CE market reflects our infrastructure sector's remarkable potential. This transformation demands a shift from traditional equipment supply to comprehensive technology-driven solutions that enhance operational efficiency and sustainability. As someone partnering in this journey, I see how digital integration, predictive maintenance, and skilled workforce development are becoming crucial differentiators. By focusing on these elements while strengthening our domestic manufacturing capabilities, we're not just growing our presence - we're building a more resilient and innovative construction equipment ecosystem,” says Chandrashekar V, Managing Director and CEO, Gmmco.

“CASE Construction is preparing for this growth by investing in research & development to create innovative products tailored to the Indian market. We are expanding our product offerings and leveraging advanced technologies like telematics to improve equipment efficiency and minimize downtime, ensuring our solutions meet the diverse needs of infrastructure projects across the country,” says Shalabh Chaturvedi, Managing Director, CASE Construction Equipment – India & SAARC region.

“India is already the third largest CE market globally, and with government’s strong impetus on infrastructure development and increased capex for the same, is boosting the demand for CE Industry. Along with the domestic growth, the international demand is also showing an impressive growth, and we are hopeful that India will soon be the 2nd largest market globally, owing to the demand of infrastructural domains across sectors,” adds Kalpesh Soni, Vice President, KYB Conmat. 

“Indian construction equipment industry has witnessed steady growth over the past decade. The demand for construction equipment is expected to grow in line with expansion of infrastructure, industrial, mining and real estate developments in India,” says Sundaram Iyer, Managing Director, OLI Vibrators India.

"The Indian construction equipment industry stands at an inflection point, with significant opportunities ahead. While challenges such as cost pressures and environmental compliance persist, advancements in technology, and strong demand across sectors, paint an optimistic picture for the future," says Ranjeet Manjarekar, Vice President - Asset Management, Tata Projects.

While Indian CE industry aims to step further ahead, the journey will be challenging but not impossible, with the support of policy initiatives in manufacturing, enhancing productivity and sustainability, and increasing exports in the coming years.