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India鈥檚 construction equipment industry stands at a decisive turning point. Once viewed primarily as a sector that catered to domestic demand, it is now emerging as a global growth engine. The convergence of rapid urbanisation, massive government infrastructure investments, and a shifting international trade environment is giving India鈥檚 manufacturers an unprecedented opportunity to establish themselves as world leaders.

The global context could not be more favourable. Supply chains disrupted by the pandemic, coupled with an overconcentration of capacity in China, have made buyers rethink sourcing strategies. At the same time, India鈥檚 domestic market鈥攐ne of the fastest-growing in the world鈥攑rovides a strong foundation. The question before the industry is not whether India can lead, but how quickly and strategically it can capture the window of opportunity.

Domestic market with global scale

India is now the world鈥檚 second-largest market for construction equipment; a status earned through relentless infrastructure expansion. The government鈥檚 capital expenditure outlay has touched historic highs, with more than Rs 11.21 trillion allocated in FY2025-26 alone.

鈥淚ndia is the fastest-growing large economy today, and that translates directly into demand for equipment,鈥� observed Ajit Pai, Strategy Lead Partner, EY, who moderated the discussion. 鈥淲hat鈥檚 remarkable is that this growth has happened even before the full effects of mass urbanisation have kicked in.鈥�

Currently, around 37 per cent of India鈥檚 population lives in cities鈥攁 figure expected to rise by 20 percentage points within the next decade. This transition, which took developed economies a century, is happening in India within a single generation. The result is sustained, predictable demand for housing, roads, bridges, metros, airports, and digital infrastructure鈥攁ll of which require heavy machinery.

Industry leaders also note an important historical trend: whenever there has been a global slowdown, India has captured a greater share of the equipment market. 鈥淓ach time the global economy slowed, India鈥檚 equipment industry actually expanded its role,鈥� said Deepak Garg, Managing Director, Sany India and South Asia. 鈥淚t shows the resilience of our domestic demand and the way our market is structurally different from developed economies.鈥�

China-plus-one imperative

For decades, China has been the undisputed giant in construction equipment manufacturing, with more than 60 per cent share in certain categories. Its scale, cost efficiency, and supply chain dominance made it the world鈥檚 default sourcing hub.

However, the pandemic exposed vulnerabilities. With logistics disrupted and geopolitical tensions rising, buyers worldwide began diversifying. This 鈥淐hina-Plus-One鈥� strategy has already reshaped electronics and automotive supply chains. Now, construction equipment is entering the same phase.

鈥淭his is India鈥檚 moment,鈥� said Moses Eddy, Director, Kobelco Construction Equipment. 鈥淲e are no longer just a large consumption market; we are also increasingly being recognised as a reliable partner in global supply chains.鈥�

India has already climbed to the position of the second-largest equipment market globally. As China faces a slowdown in domestic infrastructure projects and pushes aggressive exports, India鈥檚 dual advantage of a thriving home market and cost competitiveness gives it a unique edge.

Closing the gaps

Yet, challenges remain. While most equipment sold in India is assembled locally, up to 80 to 90 per cent of critical components鈥攈ydraulic cylinders, high-grade steel, advanced electronics鈥攁re still imported. This dependence exposes the industry to global price swings and supply risks.

鈥淭he need of the hour is to localise component manufacturing,鈥� stressed Deepak Garg. 鈥淚f we continue to import critical parts, we will always be vulnerable to volatility in global markets. But if we strengthen our supply chains at home, India can truly compete at the global level.鈥�

Here, policy support has been critical. State governments are developing industrial clusters and vendor parks, while the central government鈥檚 Production-Linked Incentive (PLI) schemes are encouraging global suppliers to establish bases in India.

According to Karthikeyen K, Vice President, Invest India, 鈥淭he government has worked systematically to make India an attractive investment destination鈥攆rom creating plug-and-play industrial clusters to simplifying approvals. The idea is to ensure that global OEMs see India not just as a market, but as an export hub.鈥�

Financing and logistics

For India to scale exports from around $1 billion today to $5 billion by 2030, systemic issues must be resolved. Chief among them is financing and logistics.

Export competitiveness in construction equipment often hinges on long-tenure financing. Buyers in Africa, Southeast Asia, or Latin America typically require extended credit terms, which Chinese firms are able to provide with strong state backing. Indian manufacturers, however, face limitations due to short-tenure credit lines and weaker insurance mechanisms.

鈥淲ithout long-tenure, insurance-backed financing, we cannot compete with countries where governments stand behind their exporters,鈥� noted Pai. 鈥淭his is an area where policy innovation can deliver huge benefits.鈥�

Logistics is another stumbling block. India鈥檚 logistics cost鈥攃lose to 14 per cent of GDP鈥攊s far higher than the 6 to 7 per cent norm in advanced economies. Port inefficiencies, delays in container clearances, and high energy costs inflate export prices.

Moses recounted a telling example: 鈥淲hen a container is held up outside a port for 24 hours, the cost of moving goods can rise by 20 to 25 per cent. These inefficiencies directly affect our global competitiveness. Streamlining processes is as important as building new infrastructure.鈥�

Beyond machines

In construction equipment, the sale of machinery is only the beginning of the customer relationship. What matters equally鈥攊f not more鈥攊s after-sales service. Contractors making multi-million-dollar purchases expect quick turnaround on spare parts, trained service engineers, and lifecycle support.

鈥淚ndian companies must focus on after-sales if we want to become export leaders,鈥� argued Deepak Garg. 鈥淲hen a contractor in Africa or Southeast Asia buys Indian equipment, they need to know that service and spare parts will never be an issue. That confidence builds long-term trust.鈥�

India is already developing a strong base of engineers and technicians. If companies invest in global service hubs and create a reliable network of trained manpower, it could be the differentiator that sets Indian exports apart.

Technology and sustainability 

Another dimension shaping the industry鈥檚 future is technology. From telematics and fleet management systems to autonomous machinery, digitalisation is transforming how construction equipment is used. India, with its strong IT ecosystem, is well-positioned to integrate these solutions.

鈥淲e are moving towards an era where digital technologies will be as important as the machines themselves,鈥� said Pai. 鈥淭elematics, predictive maintenance, and fleet optimisation are no longer optional; they are essential to remain competitive.鈥�

Sustainability is another key growth driver. With global regulations tightening around emissions and contractors demanding greener solutions, the demand for electric, hybrid, and fuel-efficient equipment is set to rise.

Moses emphasised: 鈥淭he world is transitioning towards low-carbon solutions, and construction equipment must keep pace. India has a golden chance to lead in this area, given the government鈥檚 push for clean energy and green mobility.鈥�

Path forward

The trajectory is clear: India鈥檚 construction equipment sector is moving from being domestically oriented to globally ambitious. To succeed, industry leaders emphasise three priorities:

• Localisation of critical components: Building domestic supply chains for hydraulics, steel, and electronics.
• Robust financing and logistics systems: Enabling competitive exports through long-tenure credit and cost-efficient trade infrastructure.
• Service-driven exports: Creating strong after-sales ecosystems to build trust in global markets.

鈥淚f we address these gaps, India can replicate the success of its automotive sector,鈥� said Karthiyen. 鈥淲e have the scale, we have the talent, and now we must build the ecosystems to match global expectations.鈥�

India鈥檚 construction equipment industry is no longer just building for India鈥攊t is building for the world. From highways in Africa to metro projects in Southeast Asia, the imprint of Indian machinery is beginning to spread.

With a fast-growing domestic market, a government committed to manufacturing-led growth, and global buyers actively seeking alternatives to China, India has all the ingredients for success.

As Garg summed it up: 鈥淲e have a once-in-a-generation chance to make India a global manufacturing hub for construction equipment. If we take the right steps in the next three years, the next three decades will belong to us.鈥�

The foundation is already laid; what remains is to build higher, stronger, and for the world.