India’s Roads Sector Set to Boost Construction Equipment Demand in H2 FY26: Volvo CE

India’s roads and highways sector is poised to become a major growth engine for construction equipment (CE) demand in the second half of FY26, according to Dimitrov Krishnan, Managing Director of Volvo CE India. The strong push is backed by the government’s allocation of ₹11 lakh crore for infrastructure creation this fiscal year.

Speaking to leading industry media, Krishnan highlighted that the National Highways Authority of India (NHAI) plans to tender 124 projects worth ₹3.4 lakh crore during FY26. Alongside national highways, State-led road initiatives, rural connectivity programs, and mining activities are expected to provide additional support, offsetting short-term fluctuations in demand.

“Execution typically accelerates post-monsoon, and we anticipate a stronger second half. From Volvo CE’s perspective, the roads sector remains a reliable growth driver, underpinned by the government’s long-term commitment,” Krishnan said.

However, he noted that the overall CE landscape is uneven, with demand for urban construction and real estate-related equipment remaining subdued due to varying macroeconomic conditions and shifting government capex priorities. Implementation delays caused by excessive rainfall in key regions and constrained State finances have also impacted timelines for road projects.

Despite these challenges, the mining sector, particularly coal and iron ore, is expected to rebound, sustaining CE demand even as urban construction activity remains moderate. Krishnan added that external factors, including global trade uncertainties and supply chain disruptions, have further emphasized the need for domestic capability building in critical components such as engines, hydraulics, and electronics.

Currently, India ranks as the world’s third-largest CE market, valued at $6.5 billion, and is projected to become the second-largest by 2030. Industry estimates suggest the CE sector could grow into a $25 billion market, with exports contributing approximately $3 billion, reflecting India’s growing global competitiveness.

With government focus shifting toward expediting project execution and the post-monsoon demand surge, the roads and highways sector is set to remain a key engine of construction equipment growth through FY26.