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Indian Construction Equipment Market Slow Growth Forecast in FY26

Indian Construction Equipment Market Slow Growth Forecast in FY26

BY Realty+
Published - Thursday, 15 May, 2025
Indian Construction Equipment Market Slow Growth Forecast in FY26

India’s construction equipment (CE) market is projected to grow at a modest, low single digit pace in FY26. Industry executives remain cautious, however, citing restrained government capital expenditure (Capex) and persistent challenges in key infrastructure sectors.

While FY25 saw growth, momentum may taper going forward as infrastructure allocations to highways and railways appear flat. Additionally, geopolitical developments, financial liquidity constraints and policy uncertainties could pose further risks to demand, as per industry analysts.  

Despite typically subdued demand during election cycles, FY25 defied expectations. Political stability and continued confidence in policy direction helped sustain equipment sales across several categories.

Sector performance in FY25 reflected broader macroeconomic and geographic trends. While urban and industrial infrastructure spending propped up demand for medium and large excavators, rural markets were subdued due to reduced funding for programs like PMAY, PMGSY and Jal Jeevan, weighing heavily on mini excavators and backhoe loaders.

The transition to Bharat Stage CEV-V emission norms added cost pressures and triggered supply chain realignments, causing temporary disruptions in production and sales cycles.

Geographically, Western India outperformed with 20% annual growth in earthmoving equipment sales, fueled by pre-election Capex and industrial investments in states like Maharashtra. Northern and Eastern India were flat, while Southern India saw a decline due to muted Capex and a lack of large-scale projects.

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