Emerging Trends

Forming the largest segment in the construction equipment space in India, earthmoving equipment is primarily used in mining and construction activities. The demand for such equipment is expected to increase on the back of increasing infrastructure development and greater availability of equipment finance. The country’s equipment rental and leasing business too has a strong growth potential, given that the segment is still small relative to developed markets. Of late, the construction equipment segment has been evolving – transitioning from the mere sale of machines to taking steps to improve the customer experience. Equipment manufacturers are also making sincere efforts to adopt user-friendly technology and reduce the carbon footprint.

Emerging trends

Orientation towards greater exports

According to industry reports, global construction equipment providers and manufacturers are eyeing India as a manufacturing hub, while domestic players are also ramping up their manufacturing capability, sales network and spare parts availability. At present, domestic construction equipment companies are earning almost 20 per cent of their revenues from exports. Going forward, the aim is to increase not only export revenues but also the percentage of revenue earned from exports. India’s geographical location gives it easy access to a range of markets such as those in Africa and Southeast Asia, which is a positive and bodes well for increasing export revenues.

Focus on enhancing customer experience

There has been a shift in the approach of equipment providers, with players in the space responding to pressing issues raised by buyers. Products with more power efficient engines and better performance are being launched. This is in response to the increasing focus on cost savings, which can result from lower fuel consumption. Fuel savings of up to 13 per cent can translate to an average customer saving of as much as Rs 50,000 per year.

Construction equipment manufacturers are also working to enhance their equipment’s productive performance, uptime and ease of operation and maintenance so that customers can focus on business outcomes.

The business model of equipment companies is also evolving. Sales no longer end at selling a machine. Now, after-sales service is becoming increasingly important. Services such as training personnel to operate the machinery and sending representatives of the equipment company to the project site for the initial period of equipment use are also emerging.

Reducing the carbon footprint

Construction activity, if carried out irresponsibly, can lead to irreversible damage to the surrounding ecosystem. With growing environmental concerns, companies have started changing their approach with environmental costs being factored in. There is also a focus on reducing the carbon footprint of such activities and as a result fuel efficient products are being sought.

Changing equipment design

Equipment design is changing with greater emphasis being laid on operator safety and comfort. The ergonomics of equipment has been improving with cabin designs targeted at enhancing operator comfort and reducing fatigue.

Equipment manufacturers, apart from making efficient, robust and reliable machines, are also fitting equipment with high-end, user- friendly technology solutions, which allow operators to perform more efficiently.

There has also been a focus on developing equipment that requires lower initial investment and has lower operation costs. There have been tremendous technological advances to reduce wear and tear, offer high performance levels and decrease equipment downtime. Further, equipment is also being increasingly tailor-made to suit specific customer requirements.

Advanced equipment

Technologically advanced construction equipment is still not popular in the Indian market, as compared to developed countries, for instance, the Middle East. While the main issue is that of financing, which has been difficult for construction companies to secure, the other concern is that the requisite investment in research and development (R&D) by domestic manufacturers has been lacking.

At present, a key focus in the construction sector is to optimise resource management. This has created a demand for technologies such as internet of things-enabled equipment, industrial automation and control systems, simulator training, equipment control and guidance, advanced site surveying technologies, and machine guidance and control systems, which are compatible with enterprise resource planning software solutions.

Rental and leasing market

According to industry sources, the rental and leasing equipment market in India is pegged at $2 billion. Of the total construction equipment used annually, around 20 per cent is hired. Currently, most of the leasing/renting transactions take place locally through brokers in an opaque manner and the unorganised segment caters to nearly 70 per cent of the rental and used equipment volumes. With the easy availability of financial schemes and the increasing use of construction equipment, the scope of the equipment rental industry is also growing.


In October 2016, Srei launched the country’s first online marketplace for leased and rented construction equipment. The platform is a

digital marketplace for construction equipment, machinery and services. It allows construction equipment owners to list their assets/services, negotiate with buyers, finalise terms of the deal, generate digital contracts/invoices and receive real-time payments. The platform will offer total solutions for all types of construction and mining equipment and will also provide value-added services such as asset certification, valuation, parking, maintenance, logistics, spare parts and manpower.

Trade trends

Overall, there has been an increasing trend in the export of machinery across all the categories. During 2015-16, there was a significant increase in the export of transporter cranes, gantry cranes and bridge cranes, and other self-propelled boring/sinking machinery.

India exports domestically manufactured machinery to over 100 countries, with key export destinations being the Middle East, Southeast Asia and Africa. The value of exports of all equipment categories has increased significantly in the past five years.

At the same time, India’s infrastructure and mining industry is heavily dependent on imported machinery, with equipment being primarily imported from Korea, Japan, China, Russia and Germany.


Equipment manufacturers need to focus on ramping up production capacities and investing in R&D to create low-cost, efficient and technically advanced products to cater to the growing and varying needs of construction companies. Besides geographical proximity to markets, the country’s exports of construction equipment are expected to increase owing to factors such as competitive costs, increasing technology adoption and government support through programmes such as Make in India.