The Indian construction equipment industry reported a marginal decline in overall sales during FY2025-26, as slower infrastructure execution and delays in project implementation weighed on domestic demand. According to the Indian Construction Equipment Manufacturers’ Association (ICEMA), total equipment sales fell by around 2 per cent year-on-year to 1,36,995 units in FY26, compared to 1,40,191 units in FY25.
Domestic demand, excluding non-OEM exports, declined by approximately 7 per cent across most equipment categories during the year. However, exports emerged as a key growth driver, registering a 32 per cent increase and reaching record levels across major segments.
ICEMA said the Indian construction equipment sector continues to remain the world’s third-largest market for construction equipment. The industry is currently estimated at USD 10 billion and is projected to grow to USD 14.76 billion by 2030 at a CAGR of 8.3 per cent.
Domestic Demand Impacted By Execution Delays
According to ICEMA, multiple factors affected domestic equipment demand during FY26. These included delays in land acquisition, slower project awards, reduced pace of National Highway construction, moderation in Jal Jeevan Mission implementation and delayed contractor payments. The association also pointed to rising equipment costs following the implementation of CEV Stage V emission norms from January 2025, along with higher crude oil and bitumen prices.
Deepak Shetty said the decline should be viewed in the context of slower infrastructure execution rather than structural weakness in the sector. “While Government capex allocations continue to remain at historically high levels, delays in project execution, land acquisition challenges and slower disbursement cycles impacted equipment demand during the year. At the same time, the industry demonstrated resilience through a strong 32 percent growth in exports, highlighting the growing global competitiveness of Indian-manufactured construction equipment,” he said.
Earthmoving Equipment Continues To Lead Market
Earthmoving equipment retained its dominant position in the industry with a market share of around 71 per cent. Sales in the segment stood at 97,236 units, reflecting a 2 per cent year-on-year decline.
Material handling equipment sales fell by around 10 per cent to 15,290 units, while concrete equipment sales remained largely flat at 14,486 units. Road construction equipment recorded positive growth of approximately 6.3 per cent to 7,445 units, while material processing equipment grew modestly by 1.2 per cent to 2,538 units.
ICEMA also noted that more than 95 per cent of equipment sold in India continued to be manufactured domestically during FY26. Imports increased by approximately 17 per cent, mainly in earthmoving, material handling and concrete equipment categories.
Export Growth Supports Industry Momentum
Exports emerged as a significant positive for the sector during FY26, supported by improved manufacturing capabilities, competitive pricing and alignment with global emission standards following the adoption of CEV Stage V norms.
Vivek Hajela said the current slowdown was largely linked to execution-related challenges rather than underlying demand potential. “As infrastructure implementation accelerates, project execution improves, and project awarding activity gathers pace, the industry is well-positioned to return to a stronger growth trajectory,” he said.
Budget Measures Expected To Support Localisation
The association also highlighted measures announced in the Union Budget 2026-27, including a dedicated incentive scheme for the Construction and Infrastructure Equipment sector. According to ICEMA, the scheme is expected to support localisation of critical components such as hydraulics, engines, transmission systems and undercarriage parts.
The government’s increased public capital expenditure allocation of ₹12.2 lakh crore for FY27, along with investments in freight corridors, railways, waterways and coastal cargo infrastructure, is expected to support future equipment demand.