The Indian construction sector, the country’s economic engine, has progressed significantly over the past few years. The sector is currently the third largest in the world. With the launch of the ambitious National Infrastructure Pipeline, the PM Gati Shakti Master Plan, and the government’s aim to transform India into a $5 trillion economy by 2024, the construction sector is witnessing a robust increase in demand. These initiatives are transforming the sector by promoting a holistic approach to the construction landscape of the country. Moreover, construction equipment manufacturers are being presented with tremendous opportunities to expand further.
Technology holds the potential to transform the Indian construction industry by introducing new and innovative methods. The decarbonisation of the construction sector is necessary to reduce India’s carbon footprint by 30-35 per cent by 2030 and achieve net zero targets by 2070. With the adoption of alternative fuels and sustainable materials, the sector can significantly reduce emissions.
Sector growth
According to data from the Ministry of Statistics and Programme Implementation, the gross added value (GVA) of the construction industry (at constant 2011-12 prices) increased from Rs 11.29 trillion in 2021-22 to Rs 12.42 trillion in 2022-23, registering a growth rate of 10 per cent. In terms of quarter-on-quarter growth, the construction sector grew by 7.6 per cent in the first quarter of 2023-24 over the GVA of the corresponding period in 2022-23 (from Rs 2.77 trillion in 2022-23 to Rs 2.98 trillion in 2023-24). Meanwhile, in the second quarter of 2023-24, the construction sector witnessed a growth of 13.4 per cent, from Rs 2.69 trillion in 2022-23 to Rs 3.05 trillion in 2023-24. The growth in GVA during 2023-24 was primarily driven by an improved pace of project execution as well as the moderation in raw material prices.
Construction equipment market
The overall growth in the construction equipment industry can be attributed to the positive individual growth in each equipment segment, spurred by accelerated construction activity. It recorded an overall growth of 26 per cent in sales volumes in 2022-23, as per the Indian, Construction Equipment Manufacturers Association. Total equipment sales crossed the 0.1 million mark for the first time and touched 107,779 units during 2022-23. The growth in the construction sector has been driven by a 29 per cent rise in domestic sales and a 3 per cent growth in exports.
The construction equipment industry consists of five broad segments – earthmoving equipment, road construction equipment, material handling equipment, material processing equipment, and concrete equipment. Of these, material processing equipment witnessed the highest growth in annual domestic sales at 74.2 per cent in 2022-23 as compared to 2021-22, followed by material handling equipment at 31.4 per cent. All equipment segments showed significant growth in 2022-23, except road construction equipment, which registered a decline of 3 per cent. This can be attributed to fluctuating road construction progress and rising material costs during the period under consideration.
The construction equipment market has improved significantly, characterised by increased mechanisation and the digitalisation of equipment. Technologies such as intelligent control systems, telematics, automation, and internet of things (IoT) are being increasingly integrated into new construction equipment to optimise work and increase efficiency.
Technological advancements
Technologies such as light detection and ranging and drones are being employed for accurate surveying and mapping of project sites, aiding in topography analysis and data collection. Building information modelling (BIM), artificial intelligence, and machine learning have improved road construction by enhancing design and visualisation. For instance, Arunachal Pradesh used the indigenous road construction technology Rejupave to construct high-altitude bituminous roads at low and sub-zero temperature conditions. Similarly, the Border Roads Organisation used this technology to build bituminous road sections at the Sela Road Tunnel and the LGG-Damteng-Yangste road section near the China border in Arunachal Pradesh. The technology’s asphalt modifier is bio-oil-based, which significantly lowers the heating requirement of bituminous mixes and preserves the bituminous mix temperature during transit. This helps in reducing greenhouse gas emissions.
Meanwhile, BIM, advanced analytics, drones, and IoT digital systems are being increasingly utilised by metro rail corporations. The Nagpur metro achieved 5D-BIM integration through iTWO, which provided an integrated view of the project by linking the 3D model, project schedule, and cost. In addition, The Delhi Metro, for its Phase IV, is equipping its tunnel boring machines with the bore tunnelling electrical ahead monitoring system. It is a non-intrusive ground predicting technique specially designed for the underground construction industry and can be used in hard rock, soft and mixed ground geology, under or below the groundwater table. Indian Railways is also using advanced technologies to enhance efficiency, cost-effectiveness, and safety in the design, construction and maintenance of railway infrastructure. India’s first vertical lift railway bridge, the new Pamban bridge, uses a system of counterweights and cables to move an interior lift span section that remains horizontal as it is raised up and down like an elevator, allowing river traffic to pass beneath the structure. The project is under construction and is expected to be commissioned by February 2024.
To strengthen and advance 3D printing technologies for the Indian construction sector, ABB Robotics and Simpliforge Creations have collaborated to enable construction companies to build structures faster, more sustainably, and safely. ABB’s robot-based system by Simpliforge is built to operate in wet and robust construction environments, and can work seamlessly with concrete and cementitious material.
Material market
Cement production in India increased by 6.8 per cent from 350.59 million tonnes (mt) in 2021-22 to 374.55 mt in 2022-23. The growth in cement production has been driven by the escalating number of construction activities due to the rising demand and need in the housing sector. The wholesale price index for the manufacturing of cement, lime and plaster registered an increase of 9 per cent in 2022-23 over 2021-22. With the continuous increase in demand, the cement industry will further add capacities of 150-160 mt from 2024-25 to 2027-28, as per CRISIL estimates.
India’s finished steel production has increased by 16.66 per cent from 113.6 mt in 2021-22 to 132.53 mt in 2022-23, and its utilisation increased significantly by 49.86 per cent in 2022-23 over 2021-22. The increase in production and consumption can be attributed to changes in export taxes and import duties on steel, complemented by the rising demand for affordable housing, infrastructure development and construction projects, leading to a pan-India demand for steel.
In order to improve energy efficiency and achieve environmental sustainability, it is crucial to use green cement and steel. Green material is produced by companies through various manufacturing techniques for reducing carbon emissions. Notably, JSW Cement is India’s first cement manufacturer to receive the GreenPro Certification for Portland slag cement from the Confederation of Indian Industry – Indian Green Building Council. In addition, Saarloha Advance Materials Private Limited (formerly the Kalyani Group) has pioneered the production of green steel and launched two green steel brands with reduced emissions, which was achieved through the utilisation of 70 per cent scrap and renewable energy in the electric arc furnace.
Adoption of sustainable measures
There has been a consistent uptake of alternative sustainable materials, such as modified bitumen, plastic waste, eco-friendly concrete, geosynthetics and fly ash for road construction. For instance, the utilisation of plastic waste by road developers has increased, supported by strict enforcement of rules by relevant authorities. In 2022-23, more than 2,500 km of national highways were constructed with the use of plastic waste. To promote its usage further, the Ministry of Road Transport and Highways mandated the use of the waste material in the hot mix bituminous wearing coat or top layer on all service and slip roads across the country’s national highway network. Further, there was increased usage of concrete instead of asphalt to improve the durability of roads, driving the demand for concrete mixing equipment. Moreover, the railway sector shifted focus to recyclable materials such as steel and aluminium for building tracks and other structures. Metro rail corporations are also began adopting sustainable materials at a large scale to reduce operational costs.
Sector outlook
The outlook for the construction sector is fairly optimistic, supported by the execution of numerous infrastructure projects across various sectors, including roads and bridges, railways, ports, urban rail and tunnels. Major programmes such as Bharatmala, Sagarmala, dedicated freight corridors, and high speed rail systems, and the construction of greenfield airports, ports and urban rail-based transit systems are expected to significantly give impetus to the construction business. However, it remains essential to establish a balance between construction activities and environmental conservation to effectively reduce the country’s carbon footprint.
Ishita and Sidra
