New Delhi, May 2026.

The Indian Construction Equipment Manufacturers’ Association (ICEMA) today announced that the Indian construction equipment (CE) industry witnessed a decline of approximately 2% in total equipment sales during FY 2025–26, with overall sales declining to 1,36,995 from 1,40,191 units in FY25. Despite temporary domestic market challenges linked to slower infrastructure execution and project delays, the industry remained resilient, supported by a robust 32% surge in exports. India continues to remain the world’s third-largest construction equipment market, with the sector estimated at USD 10 billion in FY25 and projected to reach USD 14.76 billion by 2030 at a CAGR of 8.3%.

Mr. Deepak Shetty, President, ICEMA and CEO & Managing Director, JCB India Ltd., said: “The marginal decline witnessed in FY26 must be viewed in the context of slower infrastructure execution on the ground rather than any structural weakness in the industry. 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% growth in exports, highlighting the growing global competitiveness of Indian-manufactured construction equipment. We remain confident about the industry’s long-term growth trajectory driven by India’s continued infrastructure development focus.”

Key Performance Highlights – FY26

·         Total Equipment Sales: 1,36,995 units, reflecting a ~2% decline over FY25

·         Domestic Demand (excluding non-OEM exports): Declined by ~7% YoY across most equipment categories

·         Exports: Registered a strong ~32% growth, reaching record levels across major equipment categories

·         Imports: Increased by ~17%, mainly in Earthmoving, Material Handling and Concrete Equipment

·         Domestic Manufacturing Strength: Over 95% of equipment sold in India continued to be manufactured domestically

Segment-wise Performance

Earthmoving Equipment continued to dominate with ~71% market share at 97,236 units (−2% YoY). Material Handling Equipment recorded 15,290 units (−10% YoY). Concrete Equipment remained broadly stable at 14,486 units (+0.09% YoY). Road Construction Equipment posted positive growth of ~6.3% to 7,445 units. Material Processing Equipment registered modest growth of ~1.2% at 2,538 units.

Mr Ramesh Palagiri, President Designate, ICEMA & Managing Director and CEO, Wirtgen India Pvt. Ltd.,said: “The Indian construction equipment industry continues to remain resilient despite temporary challenges linked to slower project execution and infrastructure implementation gaps. The industry’s long-term fundamentals remain strong, supported by Government focus on infrastructure development and manufacturing growth. Timely project awards, faster execution on ground and improved implementation efficiency will play a critical role in sustaining industry momentum going forward.”

Infrastructure Execution Slowdown Impacted Domestic Demand

Domestic demand was impacted by several converging headwinds: National Highway construction activity fell to a seven-year low due to land acquisition delays and fewer project awards; Jal Jeevan Mission (JJM) implementation slowed with moderated fund disbursements; contractor payment delays compressed liquidity across the infrastructure ecosystem; the implementation of CEV Stage V emission norms from January 2025 raised equipment costs significantly given the high financing dependence in the industry; and global commodity price inflation through rising crude oil and bitumen costs added further pressure in the latter part of FY26.

Mr. Shalabh Chaturvedi, Vice President, ICEMA and Managing Director – India & SAARC, CASE Construction Equipment India Pvt. Ltd., said: “FY26 has been a year of temporary moderation for the construction equipment industry due to slower project execution and infrastructure momentum across certain sectors. The slowdown in highway construction activity, delays in project awards and moderation in Jal Jeevan Mission implementation impacted equipment demand during the year. However, the industry continues to remain resilient and optimistic about long-term opportunities. India’s infrastructure growth story remains strong and timely execution of projects, faster implementation on ground and improved liquidity support for contractors will be critical in restoring growth momentum for the sector.”

Strong Export Growth Reinforces India’s Global Competitiveness

Despite domestic challenges, exports emerged as a major growth driver, registering an impressive 32% increase over FY25 across most equipment categories. This reflects growing global acceptance of Indian-manufactured construction equipment due to improved quality standards, competitive pricing and enhanced manufacturing capabilities. The implementation of CEV Stage V emission norms has further aligned India with global regulatory standards, strengthening export opportunities in developed markets.

Mr. VivekHajela, Convener, ICEMA Industry Analysis & Insights Panel and Executive Vice President & Head Construction & Mining Machinery Business, Larsen & Toubro Ltd., said: “The strong export growth witnessed in FY26 reflects the increasing competitiveness and acceptance of Indian construction equipment across global markets. The industry’s fundamentals remain strong and the current slowdown is largely linked to execution-related challenges rather than 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.”

Union Budget 2026–27: A Milestone for Construction Equipment Manufacturing

The Union Budget 2026–27 marks a transformational milestone for the industry. The Government’s announcement of a dedicated incentive scheme for the Construction and Infrastructure Equipment (CIE) sector fulfils a long-standing ICEMA demand, supporting high-technology manufacturing, automation and precision engineering. The scheme will drive localisation of critical components- including hydraulics, engines, transmission systems and undercarriage parts reducing import dependence, lowering project costs and generating large-scale employment. The increase in public capex to ₹12.2 lakh crore in FY27, along with dedicated freight corridors, seven high-speed rail corridors, 20 new National Waterways and the Coastal Cargo Promotion Scheme, will accelerate infrastructure execution and directly benefit equipment demand across categories.

Future Outlook

The Indian construction equipment industry remains optimistic about long-term growth prospects driven by continued investments in roads, railways, mining, urban infrastructure, housing and rural development. While FY26 witnessed temporary moderation due to execution-related challenges, the industry expects demand recovery as project implementation improves and infrastructure activity accelerates. The strong export foundation, robust domestic manufacturing ecosystem and continued Government emphasis on infrastructure development are expected to support sustained industry growth in the coming years.