Industry leaders highlight weakening demand in SAARC nations but project strong growth in Europe, the UK, the US, and Australia.
28 May 2025 | 1478 Views | By Yukta Mudgal
India’s share in the global construction equipment market has the potential to grow fivefold, according to top industry executives, who cite rising demand from developed markets and supportive trade agreements such as the UK-India Free Trade Agreement (FTA) as key drivers. The industry also anticipates mid-double-digit export growth in FY26, ...
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India’s share in the global construction equipment market has the potential to grow fivefold, according to top industry executives, who cite rising demand from developed markets and supportive trade agreements such as the UK-India Free Trade Agreement (FTA) as key drivers. The industry also anticipates mid-double-digit export growth in FY26, buoyed by upgraded emissions and safety standards.
Experts say the industry may be at a turning point regarding exports from India. V. Vivekanand, President of the Indian Construction Equipment Manufacturers’ Association (ICEMA) and Managing Director of Caterpillar India, stated that while demand from developing economies, such as those in the SAARC region, is softening, markets in Europe, the UK, the US, and Australia are expanding rapidly.
“The volume of exports to developing countries may be shrinking, but we are now aligned with global standards in safety, efficiency, and technology, and there is rising demand from developed markets,” said Vivekanand. “At present, India’s construction equipment exports make up less than 3% of the global market, compared to 12–15% for countries like China, Korea, and Japan. We have the potential to grow fivefold and even surpass them.”
Deepak Shetty, President Designate of ICEMA and CEO & MD of JCB India, told Autocar Professional that exports could rise by at least 15% in the current fiscal year. “All our machines now comply with Stage V emission norms, enabling us to cater to Europe. More and more export destinations are becoming accessible,” he said.
Representing the Indian arm of UK-headquartered JCB, Shetty also underscored the benefits of the UK-India FTA. “Last year, we shipped nearly 70,000 tonnes of components from India to our UK plants. The agreement will only bolster that,” he noted. “It also includes a clause exempting Indian engineers traveling to the UK for technical assignments from social security contributions for up to three years—this is a major incentive for talent mobility.”
In 2024–25, the Indian construction equipment industry recorded modest growth of 3%, with total sales touching 1,40,191 units, as per ICEMA data. Domestic sales stood at 1,26,961 units, up 2.7%, while exports climbed 10% to 13,230 units, reinforcing India’s standing as the third-largest construction equipment market globally.
Despite a healthy export trajectory, domestic growth in 2024–25 moderated in contrast to the previous year’s 26–27% surge. Shetty attributed this deceleration to the general elections and the Model Code of Conduct.
Looking ahead, industry stakeholders remain optimistic, with expectations of government policy support and a favorable monsoon season likely to boost rural demand, which accounts for nearly 65% of construction equipment usage in India.