The $100 Bn Opportunity

India’s construction equipment (CE) industry is powering into a new growth phase, fuelled by record government infrastructure spending, an urgent push for self-reliance, and global shifts in technology and sustainability. With demand for advanced, durable, and environmentally aligned machines rising across roads, mining, and energy projects, the industry is preparing to redefine its role as both a domestic enabler and a global contender.

Supply chain independence

A central challenge for the industry remains its value chain resilience. While India has built significant manufacturing capacity in construction equipment, there are still critical gaps in component availability. Closing these gaps is crucial for both cost competitiveness and long-term self-reliance.

Industry leaders agree that the sector must aggressively develop its ecosystem of domestic suppliers, particularly in areas where India is still import dependent. The government’s firm regulatory direction—particularly around emissions and safety—has provided a clear framework. But technology and innovation tailored to Indian conditions remain a top priority.

India’s aspiration is not just to manufacture machines but to become a centre of technology development for the global CE industry. That will require OEMs to invest in R&D, design India-specific solutions, and align with sustainability targets without compromising cost-effectiveness.

Roads and mining

Two sectors stand out as the primary drivers of CE demand over the next decade: roads and mining.

According to Sandeep Singh, Managing Director, Tata Hitachi Construction Machinery, India’s road-building programme alone will require 50,000 km of new highways in the next five years. This massive scale of activity translates into sustained demand for excavators, loaders, compactors, and other road-building equipment.

But there are hurdles. Contract awards often face delays, financing issues persist, and project execution is sometimes hampered by bottlenecks. Timely resolution of these challenges is essential to keep demand on track.

Mining is the other critical driver. With coal still contributing around 60 per cent of India’s power generation, the sector will remain indispensable for at least the next 15 years. Mining operations are relentless, with machines running 20 to 24 hours a day, placing immense demands on equipment. This requires machines that are not just efficient but also exceptionally durable and reliable.

For OEMs, this means continuous innovation in design, fuel efficiency, and maintenance support to keep India’s mining backbone resilient.

While infrastructure demand is strong, what’s changing even more rapidly is the expectation of customers. The days when a contractor looked only for a reliable machine and basic service support are long gone.

“Today, customers expect end-to-end solutions that cover the entire lifecycle of equipment,” says Vivekanand Vanmeeganathan, Managing Director of Caterpillar India. This includes:

• Guidance on the most suitable equipment for specific applications.
• Application engineering to optimise performance.
• Cost-per-hour and lifecycle cost reductions.
• On-site service and spare parts availability to maximise uptime.
• Options for refurbishment, resale, and technology upgrades.

The shift has transformed OEMs into partners rather than just suppliers. Companies are deploying service engineers at project sites, integrating telematics to track machine health, and offering flexible financing and trade-in schemes. Increasingly, the CE industry is positioning itself as a solution provider, enabling customers to reduce costs and improve productivity in highly competitive markets.

Technology transition

Globally, the CE industry is undergoing a wave of innovation: electrification, hybrids, alternate fuels, autonomous machines, and advanced safety systems. But in India, adoption remains gradual and uneven.

Dimitrov Krishnan, Managing Director, Volvo CE India, notes that the gap between developed markets and India is stark. “Adoption of next-gen technologies here is limited not by availability, but by affordability and ecosystem readiness,” he explains.

For contractors working on thin margins, advanced technologies often appear expensive. Add to that the way contracts are awarded—where cost is a dominant factor—and it becomes clear why cheaper, lower-spec machines still find buyers.

Bridging this gap requires more than OEM innovation. It needs policy enforcement of safety and emissions standards, financing models that make advanced equipment affordable, and sustained education of contractors on the long-term savings of lifecycle efficiency. Without such systemic support, India risks being trapped at the low end of the global technology spectrum.

Going global

India’s CE industry is not only serving domestic demand; it is also beginning to look outward. But building a global footprint comes with unique challenges.

For VG Sakthikumar, Chairman and Managing Director, Schwing Stetter India, localisation has been a key enabler. With over 95 per cent of the company’s components sourced within India, the foundation for competitiveness is strong. But to succeed internationally, Indian OEMs must go beyond exporting domestic models.

Products need to be customised to local regulations and emission norms, supported by strong after-sales service networks, and priced with competitive financing options. In many global markets, particularly in Africa and Southeast Asia, Chinese competitors offer generous financing packages that Indian OEMs currently cannot match.

Equally important is the challenge of talent. “We cannot simply export engineers from India to run international operations,” Sakthikumar explains. “We need to build local talent pools in those countries to provide sustained service and engagement.”

Quality and cost competitiveness remain India’s strengths, but success in global markets will hinge on how quickly Indian OEMs build financing partnerships, digital support ecosystems, and local service capabilities.

Sustainability and collaboration

Two themes cut across every aspect of the CE industry’s evolution: sustainability and collaboration.

On the sustainability front, OEMs are investing in fuel-efficient machines, hybrid technologies, and materials that reduce emissions. With India’s infrastructure growth heavily dependent on carbon-intensive sectors like coal, the industry faces the delicate task of balancing green commitments with economic realities.

Collaboration is equally critical. Supply chain localisation requires partnerships between OEMs and domestic component makers. Financing solutions demand joint efforts with banks and NBFCs. Skill-building will need cooperation with governments, contractors, and training institutes. No stakeholder can succeed in isolation.

The Indian CE industry is on track to evolve into a $100 billion market, thanks to the scale of infrastructure investments underway. But growth will only be sustainable if the industry transforms on multiple fronts simultaneously:

• Building resilient, self-reliant supply chains.
• Delivering advanced, durable, and sustainable machines.
• Offering lifecycle solutions instead of just machines.
• Creating an ecosystem for technology adoption.
• Competing globally with customised products, financing, and service networks.

India has already demonstrated its ability to build world-class roads, airports, metros, and industrial corridors. The next step is to build the machines and ecosystems that power these achievements—innovative, sustainable, and globally competitive.