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India’s construction equipment industry is expected to grow at a CAGR of 12 per cent to reach $25 billion by the end of this decade, aided by the government’s focus on expanding the infrastructure sector, a report by Indian Construction Equipment Manufacturers Association (ICEMA) reveals.
India is the world’s third largest market for construction equipment (CE) with an industry size of around $10 billion (FY24) and has the potential to transform into a manufacturing and export hub, the industry body notes.
“As a result of current announced infrastructure investments in India, the CE industry is expected to reach $25 billion in FY30, posting a CAGR of 12 percent with an envisaged investment in the industry value chain of around $4 billion, which includes around $1 billion over next five years in manufacturing by OEMs and 3X investment (around $3 billion) by suppliers, component manufacturers and distribution channels,” ICEMA said in the report, 2035 Construction Equipment Market Outlook for India.
Deloitte acted as the knowledge partner.
Indian CE market has more than 50 OEM manufacturers and provides employment to more than 3 million people (direct and indirect). Indian construction equipment trade with the world is around $3 billion, of which imports are $2.6 billion and exports are around $500 million.
“By FY35, the CE industry is expected to reach $37 billion. However, with the commencement of the government’s ambitious Amrit Kaal vision to make India an economic and manufacturing hub by using long-term infrastructure investments, the CE industry could grow at a faster rate to achieve a market size of $42 billion in FY35,” the report noted.
With the expanding infrastructure investments in India combined with ambitious goals of making India a manufacturing hub, the CE industry in India is set to focus on enhancing exports.
India’s CE exports are currently worth about $0.7 billion comprising 0.4 per cent of global CE market size, which is projected to grow to $3 billion by 2030 (1.2 per cent of global market), it added.
Earthmoving equipment is the dominant segment with a 72 per cent share in FY23 and is expected to continue to dominate the market with an 81 per cent share in FY35. This is followed by concrete and material handling, with almost 11 per cent share in FY23 and a 6 per cent share in FY35.
The smallest segments are road construction and material processing, with 4 per cent and 2 per cent in FY23 and 6 per cent and 1 per cent in FY35, respectively, the report said.
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