India Construction Equipment Growth Halved Amid Cost Surge
By Business Desk
India’s construction equipment sector forecasts single-digit growth for FY27, down from double-digits, due to soaring material costs and geopolitical factors.
India’s construction equipment industry now forecasts a moderate single-digit growth for the current financial year (FY27), a notable reduction from earlier double-digit expectations. This revised outlook stems from significant increases in steel and bitumen prices, alongside geopolitical uncertainties and project execution challenges.
- FY27 Growth: Revised to single-digit from double-digit.
- Bitumen Prices: Surged from Rs 40,000-45,000 to Rs 80,000 per tonne; currently eased to Rs 75,000.
- Domestic Sales (FY26): Declined 7% to 113,229 units, down from 121,301 units in FY25.
- Exports (FY26): Grew robustly by 32%.
- Overall Sales (FY26): Totaled 136,995 units, a 2% decrease from 140,191 units year-on-year.
Shalabh Chaturvedi, Vice President of the Indian Construction Equipment Manufacturers’ Association (ICEMA) and Managing Director for India and SAARC at CASE Construction Equipment, highlighted the dramatic bitumen price surge. These escalating input costs have directly impacted project economics, particularly for contractors who secured projects before the price hikes.
Operational Headwinds and Market Performance
Despite these domestic hurdles, which saw a 7% decline in sales within India during FY26, the sector demonstrated resilience internationally. Robust export growth of 32% underscored the increasing global competitiveness of Indian-manufactured equipment, mitigating some internal pressures.
- Moderated fund disbursements for projects such as the Jal Jeevan Mission.
- Delays in critical contractor payments, impacting liquidity across the sector.
- Implementation of CEV Stage V emission norms from January 2025, increasing equipment costs.
- Heavy reliance on financing exacerbating the cost pressures on the industry.
India maintains its position as the world’s third-largest construction equipment market, with projections pointing towards a valuation of USD 14.76 billion by 2030. This expansion is anticipated at a compound annual growth rate (CAGR) of 8.3%.