The most recent high in the Indian construction equipment industry was in 2018. The market was disrupted in 2019 by the general election, which always causes a downturn in sales due to the legal requirement to suspend the award of public works contracts once the election is announced in case this is used as a mechanism to curry undue favor with voters.
The market sank further in 2020 due to the pandemic and only recovered modestly in 2021 as further Covid variants impacted the country. This continued into 2022 to some extent, but more significant was the impact of inflation, which increased equipment prices and adversely affected the financial viability of construction projects. As a result, the market only achieved a modest 2 per cent rise in sales last year. However, within this disappointing overall picture, crawler excavator sales grew 10 per cent, largely at the expense of backhoe loaders.
Broad-based growth in equipment sales is expected to resume this year, with the market forecast to rise 10 per cent. This will be driven by a range of infrastructure investment plans. With a general election due in 2024, this year’s budget has a particularly strong emphasis on investment as Prime Minister Modi seeks a third term in office.
Unfortunately, the election next year will temporarily derail growth and there will be further market-specific disruption due to the introduction of CEV Stage-V emissions laws in April 2024.
However, Off-Highway Research remains bullish about the medium and long-term growth prospects in the Indian market, and expects equipment sales to resume their ascent from 2025 onwards.
A full discussion on the state of the Indian construction equipment market and the outlook to 2027 is available to subscribers to Off-Highway Research’s Indian Service and Indian Database Service. For more information about Off-Highway Research’s reports and data, contact [email protected]