India’s construction equipment industry expects strong growth over the next few years and aims to become the world’s second-largest market by 2030, industry body ICEMA said on Thursday. The US and China are currently the top two markets globally.

The Indian construction equipment industry sold a total of 136,995 units during the financial year 2026, and ICEMA expects the market to grow to around 250,000 units by the end of this decade, driven by infrastructure spending, exports and localisation of supply chains.

“We expect that by 2030, we should be very close to around 250,000 units,” ICEMA President Deepak Shetty said. “The milestone that we are talking about is that today we are the third-largest construction equipment market in the world, and we expect to move to the second-largest market by 2030.”

The industry faced multiple headwinds during the last financial year, including slower domestic demand, election-related disruptions, higher equipment costs following the transition to Stage 5 emission norms, and supply chain issues linked to the Red Sea crisis.

Domestic sales fell about 7% during the year, though exports grew more than 30%, helping limit the industry’s overall decline to around 2%, ICEMA said.

Shetty said demand had started recovering in the latter part of the financial year, particularly in the fourth quarter, supported by higher road project awards and continued government spending on infrastructure. “We have seen some signs of recovery in the latter part of the fiscal,” Shetty said, adding that the government’s continued focus on roads, railways, mining and rural infrastructure would support growth going forward.

ICEMA expects domestic sales to grow about 7% in the current financial year, while exports are projected to rise by at least 20%.

Exports have emerged as a major growth driver for the sector, with Indian-made machines now being shipped to more than 125 countries, including developed markets in Europe.

“It is a very proud moment that machines engineered and manufactured in India are today going to more than 125 countries,” Shetty said.

“A majority of them are going to the developed part of the world, which gives confidence about the quality of the products and how they are meeting the requirements of global customers.”

The shift to Stage 5 emission norms has helped Indian manufacturers access new export markets, especially in Europe, where similar standards are followed. India’s free trade agreements with countries such as the UAE and Australia are also expected to support export growth further.

ICEMA also said increasing localisation of components and supply chains would be critical for improving India’s competitiveness in exports, especially for excavators and other high-technology equipment that still rely on imported parts.

The association said government incentives aimed at boosting investments in the construction equipment sector could help accelerate supply chain migration to India and strengthen the country’s position as a manufacturing and export hub