CONSTRUCTION EQUIPMENT OUTLOOK 2025
The Indian construction equipment industry, a cornerstone of the nation’s infrastructure development, is poised for transformative growth in 2025. Buoyed by government initiatives, private sector investments, and advancements in technology, the sector is expected to witness robust expansion across diverse verticals.
Equipment Times delves into the market dynamics, growth drivers, challenges, and emerging trends shaping the future of construction equipment in India.
The construction equipment market in India has shown resilience despite global economic uncertainties and disruptions caused by the COVID-19 pandemic. With infrastructure development being a key focus of the Indian government, the sector is projected to grow at a compound annual growth rate (CAGR) of 8-10% in the coming years. The National Infrastructure Pipeline (NIP), aimed at boosting investments in energy, roads, railways, and urban infrastructure, is a significant driver of this growth.
Furthermore, the rising demand for urbanization, affordable housing projects under the Pradhan Mantri Awas Yojana (PMAY), and the Smart Cities Mission are expected to increase the demand for construction equipment. The construction of metro rail networks, expressways, and dedicated freight corridors adds to the sector’s promising outlook for 2025.
Growth Drivers
Government Initiatives: The Indian government’s ambitious infrastructure projects, including the Bharatmala Pariyojana and Sagarmala Programme, are set to boost demand for construction equipment. Additionally, the Make in India initiative has encouraged local manufacturing and reduced reliance on imports, further stimulating the industry.
Increased Budget Allocation: The Union Budget 2024-25 has allocated substantial funds for infrastructure development. The planned investments in road construction, railways, and renewable energy projects are expected to drive demand for earthmoving and material handling equipment.
Technological Advancements: The adoption of advanced technologies such as telematics, artificial intelligence (AI), and the Internet of Things (IoT) is transforming the construction equipment landscape. Smart and automated equipment is becoming increasingly popular, enhancing efficiency and reducing operational costs.
Private Sector Participation: Increased participation by private players in large-scale infrastructure projects through Public-Private Partnerships (PPP) has bolstered the demand for construction equipment. The entry of global players into the Indian market is also contributing to the availability of high-quality, technologically advanced equipment.
Challenges
Despite the promising outlook, the Indian construction equipment industry faces several challenges:
High Capital Costs: The high cost of acquiring advanced construction equipment can be a deterrent for small and medium enterprises (SMEs). Access to affordable financing options remains a critical need for many operators.
Regulatory Hurdles: Delays in project approvals, land acquisition issues, and complex regulatory frameworks can hinder the timely execution of infrastructure projects.
Skilled Workforce Shortage: The adoption of advanced technology requires a skilled workforce capable of operating and maintaining modern equipment. Bridging this skills gap is imperative for the industry’s growth.
Environmental Concerns: Increasing scrutiny on emissions and environmental impact has necessitated the development of eco-friendly and energy-efficient equipment. Compliance with stringent regulations can pose challenges for manufacturers.
Emerging Trends
Electrification of Equipment: As the world moves towards sustainability, the electrification of construction equipment is gaining traction. Electric excavators, loaders, and other machinery are becoming viable alternatives to conventional diesel-powered equipment.
Digital Transformation: Digital solutions, including Building Information Modeling (BIM) and fleet management software, are revolutionizing project management. Real-time monitoring and predictive maintenance are improving equipment uptime and reducing operational costs.
Rental Market Growth: The construction equipment rental market is experiencing significant growth in India. Renting equipment offers cost-effective solutions for contractors, especially SMEs, enabling access to advanced machinery without substantial capital investment.
Sustainability Initiatives: Manufacturers are increasingly focusing on developing sustainable products. The use of recycled materials, energy-efficient designs, and eco-friendly production processes is becoming a priority in the industry.
Focus on Safety: With the increasing scale of infrastructure projects, safety has become a paramount concern. Equipment manufacturers are integrating advanced safety features, such as collision avoidance systems and remote operation capabilities, to enhance worker safety.
Regional Analysis
The growth of the construction equipment industry is not uniform across India. While metro cities like Delhi, Mumbai, Bengaluru, and Hyderabad remain key markets, Tier 2 and Tier 3 cities are emerging as new growth hubs. These regions are witnessing increased construction activity driven by urbanization and industrialization.
The development of industrial corridors, such as the Delhi-Mumbai Industrial Corridor (DMIC) and Chennai-Bengaluru Industrial Corridor, is further boosting demand for construction equipment in these areas.
The Role of Innovation to Watch Out for in 2025
Innovation remains at the heart of the construction equipment industry’s evolution. Manufacturers are investing heavily in research and development (R&D) to introduce innovative products that cater to the diverse needs of the Indian market. Autonomous equipment, hybrid engines, and telematics are some of the groundbreaking advancements reshaping the industry.
As the construction equipment industry heads into 2025, innovation stands at the forefront of reshaping the sector. With an increased emphasis on sustainability, efficiency, and digital transformation, manufacturers and stakeholders are set to redefine the landscape of construction operations. Here are the key areas where innovation will make a significant impact:
Sustainability-Driven Solutions
In line with global climate goals, 2025 will see the proliferation of eco-friendly construction equipment. Electric and hybrid machinery, powered by advanced battery technologies, will gain momentum, reducing emissions and operating costs. Biofuels
and hydrogen-powered equipment are also emerging as promising alternatives, offering clean energy options for heavy-duty tasks.
Automation and Robotics
Automation will continue to revolutionize construction sites. Autonomous construction vehicles, including self-driving loaders and excavators, will enhance productivity and safety. Robotics will play a critical role in repetitive or hazardous tasks, minimizing human intervention and operational risks.
Smart Technology Integration
Smart construction equipment, equipped with IoT sensors and AI-driven analytics, will enable real-time monitoring and predictive maintenance. These technologies will help optimize machine performance, reduce downtime, and extend equipment lifespans, ensuring greater operational efficiency.
Digital Twin and Simulation Technologies
Digital twin technology is set to transform project planning and execution by creating virtual replicas of equipment and construction sites. This will allow for real-time simulation and optimization, helping stakeholders address potential challenges before they arise, thereby saving time and costs.
Advanced Materials and 3D Printing
Innovations in materials, such as lightweight composites and self-healing concrete, will enhance the durability and performance of construction equipment. Meanwhile, 3D printing technology will enable the rapid production of customized parts, reducing lead times and ensuring quicker maintenance solutions.
Enhanced Safety Features
The integration of AI-powered safety systems, such as collision avoidance and operator fatigue detection, will make construction sites safer. Wearable technologies, like smart helmets and vests, will further enhance worker safety by providing real-time alerts and monitoring vital statistics.
Modular and Adaptable Designs
Modular construction equipment with interchangeable components will cater to diverse project requirements, providing flexibility and reducing the need for multiple machines. These adaptable designs will also align with the growing trend toward urbanization and compact construction spaces.
In 2025, the construction equipment industry will embrace innovation as a cornerstone of growth and transformation. By focusing on sustainability, digital advancements, and safety, the sector will not only meet the evolving demands of the global market but also contribute significantly to building a resilient and environmentally conscious future.
This year promises to be a defining one, with innovation unlocking new possibilities that will shape the industry for decades to come.
Future Outlook
As we move into 2025, the Indian construction equipment industry is set to play a pivotal role in the nation’s economic growth. The alignment of government policies with industry requirements, coupled with the adoption of sustainable and digital solutions, will be instrumental in driving the sector’s success.
While challenges like high capital costs and environmental compliance need to be addressed, the opportunities presented by infrastructure development, urbanization, and technological advancements far outweigh these hurdles. With a robust growth trajectory and a focus on innovation, the Indian construction equipment industry is well-positioned to achieve new milestones in 2025 and beyond.
The year 2025 holds immense promise for the Indian construction equipment industry. With a supportive policy environment, rising demand for infrastructure development, and a focus on sustainability and technology, the sector is set for a transformative phase of growth. Stakeholders across the value chain—from manufacturers to contractors—must collaborate to overcome challenges and seize the opportunities that lie ahead, ensuring a brighter future for the industry and the nation.
Industry voice…
V.G. Sakthikumar, Chairman and Managing Director, Schwing Stetter India, said, “The company anticipates single-digit growth in 2024 and double-digit growth in 2025, with a projected 20% increase in turnover. Growth drivers include expanding product ranges, enhancing manufacturing capacity, and leveraging infrastructure development opportunities. The company remains optimistic about India’s infrastructure goals, such as the Viksit Bharat 2047 plan, which aligns with its growth strategies.”
He further added, “After COVID, the company experienced a growth rate of 28%. However, as the base has grown larger, the projected growth rate is now a conservative 20%. Several factors contribute to this growth, including market expansion, product range expansion, and increasing market volume. Market expansion is driven by more exports and entry into new markets, while market volume growth includes both domestic and export markets where the company’s shares are expected to rise. Additionally, new projects will drive demand for the recently added products, collectively contributing to sustained growth.”
Dimitrov Krishnan, Managing Director, Volvo Construction Equipment, said, “Volvo anticipates significant growth in 2025, building on the momentum from 2024, which has already defied expectations as an election year. The infrastructure story in India has evolved into a consistent and permanent growth trajectory, breaking the cyclical patterns traditionally observed during election periods. With 70 lakh crore worth of road projects in the pipeline, the government plans to allocate 5 lakh crore annually, creating a robust demand for construction equipment. However, Volvo identifies the need to spread project execution more evenly throughout the year, as the current pattern of awarding contracts heavily in the last quarters creates operational bottlenecks. To address this, Volvo emphasizes the importance of consistent project pipelines and reduced seasonality.
In addition to road projects, Volvo expects the river linking projects, such as the recently awarded Ken-Betwa project, to drive substantial growth in the industry. These developments signal a strong and stable future for infrastructure projects, providing a solid foundation for Volvo’s growth in 2025.”
Manish Mathur, CEO – Cranes, Action Construction Equipment (ACE), said, “The year 2025 looks promising for ACE and the construction equipment industry as a whole. With numerous infrastructure projects in the pipeline and a stable government driving investment, the sector is poised for significant growth. Mechanization will further boost execution speeds, solidifying a bright future for the industry. We anticipate a CAGR of 20% over the next decade.”
Jaideep Shekhar, Managing Director - Asia & EMEAR, Terex, said, “The year 2024 has been a very strong year for us, with remarkable growth across all business segments and brands in India. We believe that this momentum will continue into 2025, supported by a strong pipeline of new infrastructure projects that are expected to be awarded soon. If these projects materialize as anticipated, 2025 could be another record year for the industry. Overall, we are optimistic about the continued growth and opportunities in the Indian market.”
Rajiv Chaturvedi, Vice President- Sales & Marketing, After Service & Parts, HD Hyundai Construction Equipment India, said, “We always look forward positively to the coming year. The Government of India, and I believe many business houses share this sentiment, has created a very positive climate. While many global geographies are struggling, India is shining bright, and we are proud to be part of this momentum. Being born here, conducting business here, and flourishing under the Make in India initiative makes us feel proud as Indians. This sentiment extends not only to us as OEMs but also to our business partners and customers. Customers have begun to respect the government’s policies and the intent behind the Make in India initiative. With this perspective, we foresee a very positive business climate from 2025 onwards. It gives us the confidence to make further investments in expanding our facilities and capabilities in the coming years.”
Alok Kumar Tripathi, Whole time Director & President, TIL, said, “We are very optimistic about 2025. The areas we are focusing on, such as infrastructure development, defense, and exports, align with the government’s priorities. With initiatives like Make in India gaining momentum, we foresee rapid growth in sectors like roads, railways, metro projects, and ports. The government’s focus on infrastructure is evident in projects like new airports and increased road construction. These developments, combined with technological advancements, ensure sustained growth for our industry.”
P.L. Muthusekkar, Chief Operating Officer (COO), Hailstone Innovations, said, “Currently, our company, Hailstone, is growing at over 50%, while the industry average is around 12-15%. This growth is driven by our entry into new markets and countries. Additionally, the stable political climate and reduced number of elections next year should allow the government to focus on pushing projects forward. This will benefit not just our company but the entire construction equipment industry.”
Amit Bansal, Director – Sales & Marketing, Building Construction Products (BCP) Division, Caterpillar India, said, “The outlook is highly optimistic. As the most populous country and one of the fastest-growing economies, India’s growth is intrinsically tied to its construction sector. Infrastructure development underpins this growth, and as construction expands, so will the demand for equipment, machinery, and associated industries. We are well-positioned to benefit from this momentum, and I see a bright future for the entire ecosystem.”
Dr. Venkat Srinivas, Business Head, Truck and Bus & Construction Equipment – Mahindra & Mahindra, said, “Mahindra’s goal is to successfully navigate the transition from CEV4 to CEV5 machines, which impacts market shares and competition. During this transitional year, factors like pre-selling of CEV4 machines and leftover stock affect market dynamics. Looking beyond 2025, Mahindra is focused on increasing its market share, volumes, and overall growth. With customer-centricity, differentiated product performance, and robust after-sales support as pillars of growth, Mahindra aims to stay competitive in the evolving market.”
Ritesh Parmar, Head – Sales & Marketing (India & South Asia) - BOMAG India, said, “We see the year 2025 as a year full of potential. With the current government focusing on infrastructure projects and deploying advanced technologies, we expect the market to maintain its growth trajectory. India’s status as a growing nation, coupled with government initiatives, ensures a bright future for the industry. We anticipate continued progress and are optimistic about BOMAG’s growth in India, driven by innovation, strong leadership, and a commitment to supporting the nation’s development.”
Narasimha Jayakumar, CEO Greaves Retail, said,“Looking ahead to 2025, the construction equipment market in India is set for substantial growth, driven by the government’s focus on infrastructure development, urbanisation, and rural upliftment. With the sector projected to grow at a CAGR of 9.5% and reach $1.4 trillion by 2025, there is a significant demand for innovative, sustainable, and efficient solutions in construction equipment. At Greaves Retail, we see this growth as a tremendous opportunity to support the construction industry’s evolving needs. Sustainability is becoming a priority, and there’s an increasing demand for eco-friendly solutions that offer zero-emission and low-noise performance. This shift is expected to gain even more momentum in the coming years, especially as industries face stricter regulations and a greater need to reduce carbon footprints. Our product range, including electric scissor lifts, boom lifts, mini excavators, and high-frequency concrete vibrators, is designed to meet these needs. By incorporating advanced electrification technologies, our AWPs deliver solutions that offer high performance, reduce operational costs, and minimise environmental impact. As electrification becomes a more central focus in the industry, we see great potential in expanding these product offerings.”
Siva Ramalingam, MD, Fiori Concrete Machines India, said, “We are very optimistic about 2025. Having established our company in 2022 and set up manufacturing by 2023, we have received a positive market response. The government’s focus on infrastructure is expected to drive double-digit growth in the industry, further boosting our operations and market presence.”
