India’s Construction Equipment Industry Faces Slowdown, Growth Drops to 3% in FY25

Unknown Apr 02, 2026 1,100 Views

India’s construction equipment sector has experienced a significant slowdown in fiscal year 2025, with growth declining to 3 percent compared to the double-digit expansion seen in previous years. The industry, which plays a crucial role in infrastructure development, has been impacted by el...

Factors Contributing to the Slowdown

- The Rs 86,000 crore construction equipment industry saw a sharp deceleration after growing by 24 percent in FY24 and 21 percent in FY23.

- Restrictions on new project announcements due to the model code of conduct before elections led to delays by both the central government and several states.

- The pace of infrastructure execution slowed, affecting national highways, rural roads, and mining projects.

- Payment delays to contractors further contributed to reduced purchases of heavy machinery, impacting major companies such as Caterpillar and JCB.

Market Trends and Industry Response

- The Indian Construction Equipment Manufacturers Association (ICEMA) reported muted demand for mining equipment over the past 15 months.

- The earthmoving equipment sub-segment recorded a modest 5 percent year-on-year growth, while other categories saw declines.

- Export growth remained mixed, with concrete equipment exports surging by 133 percent and road equipment exports rising by 122 percent year-on-year.

- However, overall export volume growth moderated to 7 percent, a sharp decline from the 49 percent increase recorded in FY24.

Future Outlook and Industry Challenges

- The industry is expected to face continued challenges, including tight liquidity conditions, financing constraints, and price escalations due to regulatory changes.

- Stricter emission norms and new safety features set to be implemented in July 2025 may increase equipment prices by 12 to 15 percent, further impacting demand.

- Despite these hurdles, the Indian government’s continued emphasis on infrastructure development is expected to provide some stability to the sector.

Source: Economic Times, Indian Construction Equipment Manufacturers Association.

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