INDIA CONSTRUCTION EQUIPMENT INDUSTRY OUTLOOK
India’s construction industry stands as the third largest globally, following China and the United States. It plays a crucial role in driving the national economy and has sustained economic growth over time. The government’s persistent investments in infrastructure development, including National Highway expansion and rail network upgrades have improved access to vital amenities in both urban and rural regions. With India’s population surge and fast-paced urbanization, the demand for housing and accompanying infrastructure such as roads, water supplies, power grids, and sewage systems is predicted to soar in the forthcoming decade. This would result in the heightened demand for construction equipment and further growth of the country’s flourishing construction industry.
India’s construction industry stands as the third largest globally, following China and the United States. It plays a crucial role in driving the national economy and has sustained economic growth over time. The government’s persistent investments in infrastructure development, including National Highway expansion and rail network upgrades have improved access to vital amenities in both urban and rural regions. With India’s population surge and fast-paced urbanization, the demand for housing and accompanying infrastructure such as roads, water supplies, power grids, and sewage systems is predicted to soar in the forthcoming decade. This would result in the heightened demand for construction equipment and further growth of the country’s flourishing construction industry.
According to 6Wresearch, the value of India’s Construction Equipment Industry was estimated at $6.74 billion in 2022. With a projected Compound Annual Growth Rate (CAGR) of 11.1% from 2023-30, the industry is predicted to reach $15.11 billion by 2030. The number of units sold in 2022 were recorded at 81,923 and anticipated to reach 154,567 units by 2030. In 2022, the earth- moving equipment segment dominated accounting for nearly three-quarters of the industry’s total revenue. Leading players in the industry, by product type, include JCB (Backhoe & Wheeled Loader), ACE (Backhoe Loader), Caterpillar (Wheeled Loader & Motor Graders), Telcon (Excavator & Crawler Cranes), L&T Komatsu (Excavator, Dozer, Vibratory & Static Compaction), Schwing Stetter (Concrete Mixer), and TATA Motors (Dump Trucks).
The construction equipment industry is driven by high growth in construction activity occurring throughout the country. The construction sector is witnessing a significant increase in investment from private enterprises, such as a $1 billion investment from Reliance Digital Fibre Infrastructure Trust and initiatives like public-private partnerships (PPPs), which were missing in India, and the onset of this much-needed investment is going to accelerate the development of infrastructure projects across the country. Over the past few years, there have been major developments in terms of financing infrastructure projects in the country, such as the setting up of the National Bank for Financing Infrastructure and Development (NaBFID) and the formation of a new quad (comprising the US, India, Israel, and the UAE) whose major focus would be on infrastructural projects in the region.
The construction equipment industry is primarily driven by the demand arising from construction activities such as the development of residential housing, commercial buildings, and large-scale infrastructure projects initiated by both the central and state governments of India. Major projects that are expected to generate significant capital investment in the coming years include the National Infrastructure Pipeline (NIP) or Gati Shakti (investment of Rs. 100 lakh crores by 2025), the Pradhan Mantri Awas Yojana (Rs. 48,000 cr investment in FY23), AMRUT and Smart Cities Mission (Rs. 13,750 cr investment in FY22), the National Highway Expansion (Rs. 20,000 cr investment in FY23), the Upgradation of the rail network (Rs. 1,40,367 cr investment in FY23), the Sagarmala Programme, and the Airport Upgradation (Rs. 25,000 cr investment in the next 4-5 years).
The construction equipment industry in India holds strong growth potential due to the rising demands in both the domestic and global markets. The industry’s production is expected to have a strong export component, with around 12-13% of the production being exported in 2021. Despite the domestic slowdown, exports grew by 60% on a year-on-year basis in FY22, according to the Indian Construction Equipment Manufacturers’ Association. With major investments from multinational companies like JCB and Schwing Stetter in manufacturing facilities in India, exports are expected to increase significantly and make a substantial contribution to the industry’s revenue in the coming years. The earth-moving equipment segment is expected to maintain its dominant position in both revenue and volume by 2030. Meanwhile, the demand for concrete equipment is also expected to rise, fueled by the increase in infrastructure projects, which would contribute significant revenue in the coming years. Given the scale and demand for construction equipment in India’s rapidly growing infrastructure construction and mining sectors, the industry is expected to experience significant revenue growth in the forthcoming years.
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