Construction Equipment Industry Seeks PLI Scheme as US Tariffs Loom

India’s construction equipment manufacturers are urging the government to roll out a Production Linked Incentive (PLI) scheme for components, as fresh U.S. tariff hikes on Indian machinery threaten export competitiveness. The call comes amid a turbulent trade environment, with industry leaders warning of potential cost escalations and market disruption if immediate policy support is not introduced.

Speaking on the matter, JCB India CEO Deepak Shetty highlighted that the sector needs both long-term competitiveness measures and short-term relief. He stressed that a PLI scheme could help India build a stronger domestic manufacturing base for critical components, reducing dependency on imports and cushioning the impact of tariff shocks.

Shetty also pointed to the need for enhanced benefits under RoDTEP (Remission of Duties and Taxes on Exported Products), which refunds embedded taxes not covered by GST. According to him, an improved RoDTEP structure, coupled with proactive Free Trade Agreements (FTAs), could help Indian exporters remain competitive in international markets despite tariff headwinds.

The U.S. recently imposed higher duties on certain Indian machinery categories, citing domestic industry protection. For construction equipment makers, this raises the landed cost of products in the American market, potentially shrinking order volumes. The industry fears that without intervention, the ripple effects could reach allied sectors such as steel, hydraulics, and electronics.

Despite these challenges, Shetty remains optimistic about India’s domestic demand outlook, driven by sustained infrastructure spending under government programmes like the National Infrastructure Pipeline (NIP) and urban development projects. He believes that strong home-market growth, combined with the right export incentives, could help the sector weather external pressures.

The industry is now looking to New Delhi for swift action—hoping that a well-structured PLI scheme and export support measures will safeguard India’s position in the global construction equipment value chain.