Make in India

India’s 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 development in India. Equipment Times looks at how ‘Make in India’ policy is helping the construction equipment sector to improve its technological status and competitiveness in the global market, company’s growth in the coming years, export market and important initiatives to cater to the requirement of International market, future strategies at a time when technological disruptions are rapidly defining businesses in the sector, challenges and suggestions to further ease a business-friendly climate.

India is poised to become the world’s third-largest economy by 2025, as per a study published in Lancet1. Driving this transformational journey is a multitude of growth drivers, including a growing construction industry that contributes nearly 9% to the Indian economy2 and is estimated to become the world’s third largest by 20223.

The construction industry is vital to India’s growth in more ways than just one. Aside from being integral to the GDP of the nation, it is also pivotal to the survival and evolution of an array of industries, in enabling the infrastructural growth that will fuel the nation’s aspiration to become self-reliant, apart from providing employment opportunities to millions of people.

After experiencing disruptions in the prevalent business environment, the industry is all set to rebound its growth trajectory at an estimated 11.6% in 20212. This will be fuelled by huge investments in infrastructure by the Government and private players. The Government has, in its budget, made its intent clear to support the private sector in building world-class infrastructure in India.

The Construction Equipment OEM market is expected to benefit from the Make in India campaign, and increased focus on Infrastructure sector by the government.

Make in India Campaign aims to turn India into a global manufacturing hub. The campaign projects India as an investment destination for manufacturing. The initiative is to reform the manufacturing sector, which currently contributes only 15 per cent to India´s Gross Domestic Product (GDP), and to increase the manufacturing sector’s contribution to 25 per cent of GDP.

Three years ago, Nitin Gadkari, Union Minister for Micro, Small and Medium Enterprises (MSMEs) and Road Transport & Highways has said that government’s target is to make the country a manufacturing hub of construction equipment in the world. He had said, to achieve the objective of self-reliance, we need to reduce imports and boost the manufacturing of various components and parts in the automobile sector which are presently being imported. He appealed to all the industries in the sector to develop industrial clusters, Technology Centres, Research labs and upgradation of technology and skills.

Gadkari had assured the stakeholders to extend all possible support in developing technology centres in India. The Minister also stressed on the need for research and cost reduction without compromising quality.

The Minister called for research, innovation and technology upgradation and emphasized on the need of joint ventures and foreign collaborations to get easy finance and compatible technology. Maximum use of LNG, CNG and bio fuels can definitely reduce the cost.

Construction Equipment Industry…

The Indian Construction Equipment Industry boasts of a large presence of global CE OEMs alongside domestic players, which has led to enhanced focus on R&D and innovation in the sector. ‘State-of-the-Art’ manufacturing technologies being used by CE OEMs in India is at par with the world.

Leaders…

Dimitrov Krishnan, President, ICEMA & Managing Director, Volvo CE India, said, “The Indian Construction Equipment (CE) industry continues to remain dependent on import of certain precision components like, hydraulic components, undercarriage and electrical & electronics, along with some fully-built machines not manufactured in India. This restricts industry’s alignment with the Govt’s Make in India initiative. Moreover, the industry expects its current market size to grow from USD 6.5 Bn to USD 25 Bn by 2030.”

Deepak Shetty, CEO & MD, JCB India, said, “For over four decades, JCB has remained committed to the India growth story. From introducing the Backhoe Loaders in India in 1979 to the global manufacturing force the company has become today, JCB India has been making the nation and its communities stronger every day. Driven by constant innovation, revolutionary products, and adherence to global quality standards, JCB has sold over 3,50,000 machines – furthering the ‘Make in India’ initiative and steering millions towards empowerment.”

Amarnath Ramachandran, Managing Director, Arx Mining and Construction Equipment, said, “The ‘Make in India’ mission is certainly a huge step in the right direction. While there is a huge impetus on manufacturing products here and also an incentive for overseas companies to setup JVs or wholly owned companies here to participate in our growth story, our industrial infrastructure is still lagging.”

Sorab Agarwal, Executive Director – ACE, said, “ACE takes pride in being a part of Building India’s tomorrow. In previous years despite all the challenges, the industry recorded a modest growth which is a testimony to the growing thrust of the government on infrastructure development duly aided by products that CE companies manufacture to enable the same.  With continued focus on creating a strong pipeline of infrastructure projects, industry is optimistic about the future growth prospects not only in the context of serving the domestic market but also gearing up to serve the global demand.”

V.G. Sakthikumar, Managing Director, Schwing Stetter India, said, “India has the potential to become a global manufacturing hub for construction equipment due to its skilled workforce and quality-driven manufacturing. However, high logistics costs and input material costs make it challenging to maintain consistency and reliability in the export market. Nonetheless, the Indian construction equipment sector has a competitive edge in terms of quality and cost, making it an attractive option for many countries.”

Sunil K Gupta, President, KION India, said, “Initiatives like ‘Self-reliant India’ ‘Make in India’, and ‘Vocal for Local’, have been impactful providing benefits and advantages to strengthen the Indian manufacturing industry ecosystem. With the introduction of the National manufacturing policy and PLI scheme in 2022, India is offering ease of doing business, a workforce of skilled-talented young minds, and a sustainable future ahead. Foreseeing a favorable market, India is receiving a noteworthy inflow of foreign direct investment (FDI) which may boost the manufacturing industry growth.”

Sanjeev Bajaj, Chief Officer, Escorts Kubota, said, “Government of India continued its focus on infrastructure growth by increased planning outlay across all the sectors. For the coming years we have aggressive planning and anticipated the volume growth. We have made our Mid Term Business Plan till FY28 and in anticipation of the industry a very aggressive Product Range, Marketing Channel and Capacity Planning is aligned and allocated adequate budget to fund that growth.  We are optimistic about the future of the business in coming years.”

Jaideep Shekhar, VP & Managing Director-APAC & EMEAR, Terex India, said, “The Indian government’s emphasis on infrastructure development and increased budget outlays is expected to create significant demand for construction equipment in the long term. However, realizing India’s potential as a global construction equipment manufacturing hub will require significant investments in infrastructure, technology, and skills development Overall, with the right investments and policies in place, India has the potential to become a major global player. Terex’s recent moves to strengthen its foothold in India’s construction equipment market suggest that there is significant potential for India to become a global construction equipment manufacturing hub. With the launch of new technologies and products such as the Franna brand of pick-and-carry mobile cranes and the EvoQuip range of crushing machines, Terex is positioning itself to capitalize on this growing market.”

V. Senthilkumar, Managing Director, Propel Industries, said, “Although Propel has always been 100% localized, the “Make in India” program has provided a conducive environment for domestic manufacturing in this sector. Incentives are provided to bring down the dependence on imports, localization of products and parts are encouraged all the while providing a positive boost in the employment sector. Furthermore, it can allow us, as a collective, to take strides on the technological front by stimulating intense research and development, and adoption of new ideas, promoting indigenous manufacturing.”

B.K.R Prasad, General Manager, Marketing, Tata Hitachi Construction Machinery Company, said, “Make in India is an important initiative by the government to enhance domestic industry capacity and skills to produce high quality products both for the domestic and export market. An initiative which helps in the expansion and growth of the manufacturing sector too – essential to enhance employment and maintain an appropriate trade balance. CE manufacturing in India has come a long way from being largely imported (in the early to late nineties) to a large part being manufactured locally to cater to the evolving customer requirements and tough local operating conditions.”

Anup Nair, Managing Director- India and South Asia, Martin Engineering, said, “As we all know, ‘Make in India’ is a major national flagship program of the Government of India designed to facilitate investment, foster innovation, enhance skill development, protect intellectual property, and build the best-in-class manufacturing infrastructure in the country. It has been striving to ensure that the business ecosystem in the nation is conducive for investors doing business in India and contributing to the growth and development of the Nation.”

Dheeraj Panda, – Chief Operating Officer (Sales, Marketing & Customer Support), SANY India & South Asia, said, “The ‘Make in India’ initiative has aided the construction equipment sector in improving its technological progress and global competitiveness. This programme has fostered the development of new and innovative products, as well as the use of modern manufacturing processes, resulting in higher quality. On our part, we have planned to increase our focus on working towards the localization rate from 40% to 75% in the next 3 to 5 years, which will not only help with cost control but will also ensure that we are able to serve our customers despite global supply chain disruptions and make products that are better suited for the Indian market.”

Sharwan Agnihotri, Head – Corporate Sales & Export, Hyundai Construction Equipment India, said, “Hyundai CE India today has state-of-the-art manufacturing facility in Chakan, Pune. We manufacture a wide range of world-class excavators for India and also for the global markets. All Global HCE factories operate on same platform on the principles of ‘Zero-defect’ and ‘One Global Quality’. Our philosophy of excellent workmanship ensures at par performance with global products and assures the customers with ‘Big Savings and High Profitability’.”

Satendra Tiwari, Head of Manufacturing, Pithampur, CNH Industrial, said, “The ‘Make in India’ programme by the Government of India has been a significant boost for the construction equipment sector in the country. It has encouraged companies to manufacture their products in India, leading to increased domestic production of construction machinery and equipment. This has not only created job opportunities but has also contributed to the growth of the sector. This has also helped construction equipment OEMs to invest in manufacturing operations, manufacturers to upgrade their production processes and improve the quality of their products. This in turn has helped India-made equipment to become more competitive in the global market by producing high-quality equipment that meets international standards.”

Paresh Patel, Managing Director, Alltech Industries India, said, “India has the potential to become a global construction equipment manufacturing hub, owing to its skilled workforce, low labor costs, and a favorable business environment. The government’s ‘Make in India’ programme has been a great enabler in promoting the growth of the manufacturing sector in the country. As a manufacturer of road construction machinery, we see a lot of potential in the country, and we are committed to playing our part in making India a global hub for construction equipment manufacturing.”

Rajesh Kaul, Vice President, Sales & Marketing, Commercial Vehicle Business, Tata Motors, said, “The Government’s ‘Make in India’ initiative can help foster a favourable environment for the development of advanced manufacturing facilities, adoption of cutting-edge technologies and increased access to skilled labour. At Tata Motors, we strongly believe that the ‘Make in India’ initiative has played a crucial role in motivating the industry to participate in the country’s economic growth. The Government’s efforts to simplify business processes and provide a supportive environment for manufacturing have helped us to improve our efficiency, productivity and competitiveness.”

Neville Mevawala, Head of Sales & Marketing, Godrej Material Handling, Godrej & Boyce, said, “As India’s manufacturing industry is continuously transforming, it is witnessing significant industrial development and a conscious adoption of green manufacturing processes by corporate India. By FY24, Godrej Material Handling hopes to hold a 28% market share for electric forklifts in India thanks to a strengthened portfolio of environmentally friendly products.”

Safar Mohammad Khan, General Manager – Sales and Marketing (HDD & Digital Tracking Systems), Apollo Techno Industries, said, “Make in India is a major national programme of the Government of India designed to facilitate investment, the primary objective of this initiative is to attract investments from across the globe and strengthen India’s manufacturing sector. It is being led by the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, Government of India. The Make in India programme is very important for the economic growth of India as it aims at utilizing the existing Indian talent base, creating additional employment opportunities and empowering secondary and tertiary sector.”

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