India’s Construction Equipment Industry May See Single-Digit Growth in FY27: ICEMA

India’s Construction Equipment Industry May See Single-Digit Growth in FY27: ICEMA

India’s construction equipment industry is likely to record single-digit growth in the current financial year as rising steel and bitumen prices, geopolitical uncertainty and infrastructure execution challenges weigh on market expansion.

The outlook marks a moderation from the double-digit growth expected at the beginning of FY27. Shalabh Chaturvedi, Vice President of the Indian Construction Equipment Manufacturers’ Association (ICEMA) and Managing Director, India and SAARC, CASE Construction Equipment, said the industry is still expected to grow, but at a slower pace than initially anticipated.

Steel and bitumen prices have emerged as key concerns for construction and infrastructure projects. According to Chaturvedi, bitumen prices, which were earlier around ₹40,000–45,000 per tonne, rose to nearly ₹80,000 per tonne before easing to about ₹75,000 in August. The sharp increase has affected project economics, particularly for contractors who had quoted for projects before the rise in input costs.

The pressure is particularly relevant for road construction, one of the largest demand drivers for construction equipment in India. Higher project costs and slower execution in some segments could influence equipment purchases during the remainder of FY27.

Despite these challenges, the market has continued to expand across several major equipment categories. Chaturvedi said equipment sales during January-July 2026 showed modest growth, although the pace remained below earlier expectations.

Industry data from ICEMA showed that total construction equipment sales in India declined about 2% to 1,36,995 units in FY26 from 1,40,191 units in FY25. Domestic sales fell around 7% to 1,13,229 units, reflecting slower infrastructure execution and cautious buying sentiment.

Exports provided a strong counterbalance, rising approximately 32% during the year. The performance highlights the growing competitiveness of construction equipment manufactured in India in international markets.

India is currently the world’s third-largest construction equipment market. The sector is projected to reach $14.76 billion by 2030, with infrastructure development remaining a major growth driver.

For FY27, infrastructure execution, commodity prices, financing conditions and geopolitical developments will remain the key factors determining the pace of construction equipment demand.