Construction Equipment Sales Decline 2% in FY26 Amid 32% Export Growth

Construction Equipment Industry Sees Marginal Decline in FY 2025-26, Exports Surge

The construction equipment industry in India registered a marginal decline of about two per cent in total sales in FY 2025-26, with overall dispatches dropping to 1,36,995 units from 1,40,191 units in the previous fiscal, according to the Indian Construction Equipment Manufacturers' Association (ICEMA).

The decline was attributed to temporary domestic market challenges, including slower infrastructure execution and project delays, even as the sector demonstrated resilience backed by a robust 32 per cent surge in exports. This growth in exports highlights the rising global competitiveness of India-made construction equipment.

ICEMA President Deepak Shetty emphasized that the marginal decline witnessed in the last financial year must be viewed in the context of slower infrastructure execution on the ground rather than any structural weakness in the industry. He noted that government capex allocations continue to remain at historically high levels, but delays in project execution, land acquisition challenges, and slower disbursement cycles impacted equipment demand during the year.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Despite these challenges, the industry demonstrated resilience through a strong growth in exports. This growth trajectory is expected to continue, driven by India's continued infrastructure development focus. India remains the world's third-largest construction equipment market, with the sector projected to reach USD 14.76 billion by 2030 at a CAGR of 8.3 per cent.

The domestic sales declined by around 7 per cent during FY26 to 1,13,229 units from 1,21,301 units in FY25, reflecting a moderation in infrastructure execution and a cautious buying sentiment across sectors.

Construction Equipment Market Share by Category (FY 2025-26)

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Earthmoving equipment continued to dominate the construction equipment market, accounting for about 71 per cent share, registering a 2 per cent year-on-year decline. Material handling equipment clocked a decline of 10 per cent YoY, while concrete equipment remained broadly stable.

However, road construction equipment posted a positive growth of 6.3 per cent, and material processing equipment registered a modest rise of 1.2 per cent. The domestic demand for infrastructure equipment faced multiple headwinds in FY26, including a seven-year low in national highway construction due to delays in land acquisitions and fewer project awards.

The implementation of CEV Stage V emission norms from January 2025 spiked equipment costs, exacerbated by the industry's heavy reliance on financing. Rising global commodity prices, particularly crude oil and bitumen, added further pressure in the latter half of the fiscal.

To restore growth momentum for the sector, ICEMA Vice President Shalabh Chaturvedi emphasized the need for timely execution of projects, faster implementation on the ground, and improved liquidity support for contractors. ICEMA is the apex body representing leading construction equipment manufacturers in India.