Higher capital spending promises stronger demand for trucks, excavators and loaders, as infrastructure expansion shifts to tier‑2 and tier‑3 cities.
01 Feb 2026 | 354 Views | By Autocar Professional Bureau
India's Union Budget 2026-27 delivers a major lift for the automotive and construction equipment sectors, with Finance Minister Nirmala Sitharaman hiking capital spending by 9% to Rs 12.2 lakh crore. This surge targets roads, urban projects, and other builds that will drive demand for trucks, excavators, and earthmovers amid economic ...
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India's Union Budget 2026-27 delivers a major lift for the automotive and construction equipment sectors, with Finance Minister Nirmala Sitharaman hiking capital spending by 9% to Rs 12.2 lakh crore. This surge targets roads, urban projects, and other builds that will drive demand for trucks, excavators, and earthmovers amid economic headwinds.
The budget spotlights a decade of infrastructure work, backed by funds like the National Investment and Infrastructure Fund and the National Bank for Financing Infrastructure and Development. These have fueled highways and bridges, boosting orders for heavy-duty vehicles and construction machines.
Tier-2 and tier-3 cities with over 500,000 residents emerge as hotspots for new roads and facilities. These growing hubs promise steady work for construction gear fleets, helping manufacturers ramp up production and logistics. The announcement also includes allocation of Rs 5,000 crore per city economic regions for five years.
Additionally, the announcement also outlays coastal cargo promotion scheme, to increase share of inland waterways and coastal shipping from 6% to 12% by 2027. The government has also decided to develop new dedicated freight corridors connecting Dankuni in East to Surat in West apart from seven high speed railway corridors.
To draw more private money into builds, a new fund offers lenders partial guarantees against project delays or cost overruns. Lower risks mean bolder investments in mega-projects, spurring sales of tippers, cranes, and loaders across the industry.