Building the Future: India's Construction Equipment Industry thrives on Sustainability and Innovation Trends
Key Growth Drivers:
- Infrastructure Development Projects: Large-scale government initiatives like “National Infrastructure Pipeline” are driving significant investments in roads, railways, ports, and airports, creating immense demand for diverse construction equipment. Over 1.4 trln EUR has been earmarked for these projects to be invested by 2025. These projects are generating a substantial demand for construction equipment like excavators, bulldozers, cranes, concrete mixers, and other machinery.
- Real Estate Boom: Rapid urbanization and rising disposable incomes are driving a surge in residential and commercial construction. As per UN projections, about 50% of India’s population will reside in urban areas by 2047, creating an unprecedented demand for urban infrastructure development. The Pradhan Mantri Awas Yojana (PMAY) and the Smart Cities Mission further contribute to the growing need for modern construction machinery.
Furthermore, EAC's recent study on construction markets identified 33 cities which will receive significant investments in to residential, commercial, and infrastructure sectors from government and private sectors (insights can be shared based upon request)
- Focus on Electric and Hybrid Solutions: Sustainability is at the forefront of material handling equipment trends. The industry is witnessing a shift towards electric and hybrid solutions, aligning with India's commitment to environmental conservation. Battery-powered forklifts, cranes, excavators, and wheel loaders are gaining popularity in warehouses and construction sites. Volvo Construction Equipment (Volvo CE) displayed India’s first grid-connected electric excavator in 50-ton class for mining and construction at EXCON 2023.
- Latest Emission Norms BS-V (CEV/TREM): The new norms for the construction equipment industry will come into enforcement from 1st April 2024. Major companies like Mahindra CE, and CASE showcased their readiness with their new range of BS-V complaint construction equipment at EXCON 2023. With the new norms, India will be among the few countries in the world with such stringent emission norms making India capable of being an export hub for the world.
Silver Lining: The Indian Construction Equipment industry has also significantly benefited from a solid component base, which has reduced its dependence on imports and improved its competitiveness on a global scale. This has resulted in an impressive 65% increase in construction equipment exports from FY’21 to FY’23. Furthermore, the implementation of latest emission norms makes India a suitable destination for exports across the world.
As the Indian construction equipment industry continues to evolve, global companies can position themselves strategically in the Indian market by staying abreast with latest trends and technologies.
For more insights and conversation on this topic, you may reach out to our expert consultant Sahil Shridhar