A year after India's construction equipment industry absorbed the cost of the country's strictest emission standards, its manufacturers say they are watching a loophole widen: rising imports of second-hand machines that were never built to meet those standards at all.
The Indian Construction Equipment Manufacturers' Association (ICEMA) raised the issue directly with Dr. V. Anantha Nageswaran, Chief Economic Adviser to the Government of India, the industry lobby body stated in its latest newsletter.
The association flagged "rising imports of non-compliant used construction equipment" as a key concern and requested that the government impose stricter import regulations, including mandatory compliance with CEV Stage V emission norms and safety standards for machines entering the country.
Behind the careful language sits a straightforward commercial grievance, and a genuine policy puzzle.
The arithmetic of the loophole
India's transition to CEV Stage V, the emission standard for construction equipment vehicles, broadly aligned with the norms in force in Europe, pushed the price of new machines up by an estimated 12 to 15%. Domestic sales fell 7% in the financial year ended March 2026 as buyers digested the increase amidst the general slowdown in road and other infrastructure-related activities. Meanwhile, imports of construction equipment rose roughly 17%, to 3,909 units from 3,352 the previous year, with the increase concentrated in earthmoving machines, material handling equipment and concrete equipment.
For manufacturers, the complaint is about a playing field that tilted just as they finished paying to level it. Every equipment maker selling in India had to re-engineer products, absorb development costs and pass part of the increase to customers to comply with Stage V. A used machine entering the country without meeting any equivalent standard competes against that investment with none of its costs.
There is an environmental irony here that gives the industry's commercial argument unusual reach. India adopted Stage V partly to cut emissions from one of the more polluting categories of diesel machinery, and partly to align Indian-made equipment with global standards, a strategy that helped drive a 31.5% export surge last year, according to the same sales report. Imports of non-compliant used machines undercut both objectives at once: they add old engines to Indian worksites while eroding the domestic market that funds the industry's cleaner product lines.
What happens next?
Any tightening would likely involve multiple arms of government: the commerce ministry's trade policy, customs enforcement at the ports, and the road transport ministry's compliance framework, which is perhaps another reason the industry chose to start with the economist whose office speaks to all of them.
Until then, the situation stands as the industry describes it: a country with world-class emission rules for the machines it builds and a considerably more relaxed attitude toward the machines it lets in.