Budget 2026‑27: Govt Announces New Scheme for CE Manufacturing

Announcing the Budget 2026-2027 speech, Finance Minister Nirmala Sitharaman introduced a new Scheme for Enhancement of Construction and Infrastructure Equipment (CIE), which will help in the industry moving closer towards self reliance. An amount of Rs 200 crore has been proposed for the scheme for 2026-2027.

The centerpiece of the industrial proposal is the CIE Scheme, designed to strengthen the domestic production of technologically advanced machinery. The scope is broad, targeting essential urban infrastructure such as elevators for multi-story apartments and fire-fighting equipment, as well as specialized heavy machinery like tunnel-boring equipment required for the nation’s expanding metro networks and high-altitude roads. 

This shift is intended to reduce the reliance on expensive imports for critical nation-building projects.

To support this high-tech pivot, the government will task Central Public Sector Enterprises (CPSEs) with establishing Hi-Tech Tool Rooms at two strategic locations. These facilities will operate as digitally enabled automated service bureaus, essentially high-tech workshops—where high-precision components  can be designed, tested, and manufactured locally at scale and at a lower cost than international alternatives.

For the construction equipment industry, this announcement addresses a long-standing bottleneck. While India has been a massive market for excavators and backhoes, the high-value segment—such as the massive tunnel-borers used in city metros has remained largely dominated by foreign OEMs. By incentivizing domestic manufacturing, the government aims to capture the value currently leaking out through imports as the national public capital expenditure (capex) rises to Rs 12.2 lakh crore for FY2026-27.

From the perspective of the automobile and broader manufacturing sectors, the introduction of automated tool rooms mirrors the "Just-in-Time" and high-precision standards found in modern car factories. The budget also emphasizes an expanded Electronics Components Manufacturing Scheme and the India Semiconductor Mission 2.0, creating a "force multiplier" effect where high-tech components produced for one sector can benefit the entire industrial ecosystem