The Indian Construction Equipment market has been on a major upswing since 2015 with the sales of construction equipment growing by 24 per cent and crossing the 90,000 unit sales milestone for FY 2017-18, propelled by significant tailwinds with the current government’s laser-sharp focus on infrastructure development and a broad-based macroeconomic push backed by the pursuit of a favourable policy regime has led to India becoming one of the fastest infrastructure developing countries in the world with almost 27 km of highways being developed on a daily basis across the country.
The infrastructure spending level stood at 9 per cent of GDP for the 12th five year plan (FY 13-17). The latest budgetary allocations for FY 2019-2020 indicate towards a continued growth momentum with the inclusion of a 4.56 lakh crore outlay towards infrastructure development focused on railways, roads, aviation & waterways. There has been a 21 per cent year on year increase in funds allocation towards railways infrastructure development along with a strong focus on rural roads development for FY 2019-2020 which is likely to further drive the sales of construction equipment in India going forward.
Construction equipment sales in India have traditionally been dominated by earthmoving equipment led by the ubiquitous and versatile backhoe loader followed by crawler excavators. The equipment sales touched the peak of 90,000 units in FY 2017-18 with a favorable overall environment and strong push & momentum for infrastructure development. The FY 2018-19 is likely to be another record year for the industry with the reduction in GST rates on construction equipment from 28 per cent to 18 per cent in late 2017 providing a major boost to equipment sales in 2018. Near term market growth projections, too, remain robust with India to be the fastest growing economy in the world in 2019 and 2020.