The Indian construction equipment (CE) industry has navigated a challenging year, 2024-25, marked by modest growth and shifting market dynamics. Despite election-related disruptions and regulatory changes such as the Construction Equipment Vehicle Stage 5 (CEV-V) norms, the sector demonstrated resilience through steady exports and rising innovation. With strong policy backing and infrastructure investments, the industry is now poised for robust, technology-driven expansion in the years ahead.
Performance snapshot
The industry registered a modest growth of 3 per cent in 2024–25, with the total equipment sales rising to 140,191 units from 135,650 units in 2023–24. This marks the slowest annual growth in recent years, following a robust 26 per cent expansion in the previous fiscal. The growth was largely driven by a 10 per cent increase in exports, which rose from 11,990 units to 13,230 units, with 88 per cent of shipments going to non-South Asian Association for Regional Cooperation countries. Domestic sales, however, remained subdued, growing by just 2.7 per cent, impacted by election-related restrictions, project execution delays and the upcoming implementation of CEV-V emission norms. The western region accounted for nearly 35 per cent of domestic demand. Despite these challenges, January-March 2025 saw steady performance with 41,214 units sold, and a 1 per cent year-on-year (y-o-y) and 5 per cent quarter-on-quarter increase driven by strong growth in March 2025, which recorded 14,739 units, up 15 per cent month on month due to a year-end procurement push. The industry also faced headwinds such as extended monsoons, rising raw material costs, supply chain disruptions from China and South Korea and a tightening financing environment. Delays in contractor payments and the proposed 12 per cent safeguard duty on steel further pressurised original equipment manufacturers’ (OEM) margins, particularly for smaller players.
Charting segment-wise performance
In 2024-25, the Indian CE industry exhibited mixed performance across its five key segments – earthmoving, concrete, material handling, road construction and material processing equipment. The earthmoving equipment segment remained the industry’s cornerstone, accounting for 71 per cent of the total sales with 99,159 units sold, reflecting a 6 per cent y-o-y growth. This was driven largely by backhoe loaders and crawler excavators, which together contributed 90 per cent of the segment’s volume. Backhoe loaders recorded 53,133 units (48,165 domestic and 4,968 exports), while crawler excavators followed with 35,816 units (33,486 domestic and 2,330 exports), supported by strong domestic demand and rising global interest.
The concrete equipment segment grew steadily by 3 per cent to 14,473 units, up from 14,034 units in 2023-24. Domestic sales held steady at 13,784 units, while exports more than doubled to 689 units. Concrete mixers led the category with 8,577 units, followed by concrete pumps and batching plants. This growth reflects continued infrastructure development and increasing international demand for Indian-manufactured concrete machinery.
In contrast, the material handling equipment segment declined by 9 per cent, with total sales falling to 17,050 units. Domestic sales dropped by 4 per cent to 16,098 units and exports fell sharply to 952 units. Pick and carry cranes dominated this segment but registered a 7 per cent decline in sales, while telehandlers faced a significant 37 per cent drop. However, growth was observed in other crane categories such as crawler, truck and rough terrain cranes.
The road CE segment posted a modest 3 per cent growth with 7,002 units sold. Although domestic sales dropped 8 per cent, strong export growth of 136 per cent offset this decline, driven by soil compactors and double-drum rollers. However, the material processing equipment segment saw a 4 per cent decline to 2,507 units, impacted by lower domestic demand and a 16 per cent drop in exports.
Trends shaping the sector
The CE industry is experiencing a technological and operational transformation, with emerging trends reshaping equipment demand, ownership models and sales strategies.
Indian Infrastructure magazine takes a look at key recent developments…
- Equipment-as-a-Service (EaaS): This model allows users to access CE on a pay-per-use basis rather than incurring high capital expenditure. It offers cost-effectiveness, financial flexibility and operational certainty. Industry leaders such as Volvo CE have taken the lead in adopting EaaS, setting a trend that is gradually influencing the broader market.
- Uptake of automation: The Ministry of Road Transport and Highways has initiated pilot programmes under the automated and intelligent machine-aided construction (AIMC) initiative. This includes the use of GPS-enabled motor graders, intelligent compactors and stringless pavers on select highway projects. A notable implementation was on the Lucknow-Kanpur Expressway, where AIMC technologies enhanced construction precision, reduced manual intervention and improved productivity.
- Technological innovation: The industry is increasingly adopting automation and robotics for enhanced safety and efficiency. For instance, Bobcat’s MaxControl remote operation system allows operators to control loaders remotely, eliminating frequent entry and exit from the cab and easing tasks that previously required two operators. This innovation boosts productivity, reduces downtime and improves job site visibility and safety.
- Electrification and hybrid equipment: There is a rising preference for electric and hybrid machines driven by environmental regulations and sustainability goals. Volvo has launched hybrid excavators such as the EC400 and EC500, which offer 15 per cent lower CO2 emissions and 17 per cent better fuel efficiency compared to traditional models. Similarly, JCB’s 19C-1E electric excavator is seeing increased demand, especially in urban areas. Improved battery technology and better charging infrastructure are further accelerating the adoption of electric CE.
Tightening emission norms
The transition to CEV-V emission norms, effective January 2025, is expected to drive a significant cost increase of 12-15 per cent for CEVs on an average, depending on equipment type. This increase stems from stricter emission and safety regulations, with OEMs likely to pass on the added costs to customers over the next 12 to 18 months. The cost impact varies based on the current emission stage. CEVs moving from Stage IV to Stage V are expected to see a moderate cost increase of 4-6 per cent, while those transitioning from Stage III to Stage V, especially equipment with engines under 37 kW, may face a sharp rise of over 12-15 per cent. This leap will require substantial technological upgrades, including the integration of diesel particulate filters (DPFs) and selective catalytic reduction systems, particularly in high-powered machines. Smaller engines (under 19 kW) will experience minimal impact. While wheeled CEVs, constituting 65-70 per cent of the industry volume, are covered under the new norms, non-wheeled off-road equipment remains exempt for now.
In the short term (primarily 2025-26), CE sales may face headwinds due to increasing costs, coupled with subdued credit growth from financial institutions, impacting affordability and overall demand. Additionally, increased import dependency for certain components, such as DPFs, could persist until the domestic vendor ecosystem strengthens. However, over the medium-to-long term, the transition could help boost Indian exports to Europe and North America (as it would harmonise the production for domestic and export markets) and also to other markets, where emission standards lag behind international best practices or where no standards are in place, given the increasing focus on sustainability.
Growth drivers and future outlook
The industry is poised for robust growth in the coming years, backed by strong policy support, infrastructure investment and evolving market dynamics. According to ICEMA, the domestic CE industry, currently valued at around $10 billion, is expected to register growth in 2025-26, potentially reaching at least $11 billion. The long-term outlook is equally promising, with the market projected to grow at a compound annual growth rate (CAGR) of 8.3 per cent through 2030, potentially reaching Rs 990 billion. This growth is underpinned by increasing demand from sectors such as infrastructure, mining and urban development.
A key growth driver is the Union Budget 2025-26, which allocated around Rs 12 trillion towards infrastructure, including roads, smart cities, highways and urban transit systems. This substantial investment is expected to stimulate equipment demand across sectors. Furthermore, government initiatives such as PM Gati Shakti, Make in India and the Production-Linked Incentive scheme are supporting localisation, manufacturing and innovation, helping reduce import dependency and promoting electric CE adoption. Electric CE, led by companies such as JCB, Tata and Hitachi, is anticipated to capture 10–15 per cent of the market by 2030, supported by a projected global CAGR of 38 per cent in this segment.
Additionally, sector-specific programmes such as the development of high-speed rail, dedicated freight corridors, greenfield airports, ports and metro networks are expected to sustain long-term equipment demand. Strong export momentum, combined with mining sector reforms and localisation efforts, positions India well to meet rising global and domestic requirements.
Prateek Chaturvedi
