Indian Construction Equipment Industry Grows 3% in FY25 on Strong Export Surge Despite Domestic Slowdown
Indian Construction Equipment Industry Grows 3% in FY25 on Strong Export Surge Despite Domestic Slowdown
Delhi/Mumbai, 28 May 2025: The Indian construction equipment sector demonstrated resilience and adaptability in FY25, registering an overall growth of 3%, according to a press release issued by the Indian Construction Equipment Manufacturers’ Association (ICEMA). This moderate growth, achieved amidst sluggish domestic demand, was largely driven by a strong 10% increase in exports, reinforcing India’s position as the third-largest construction equipment (CE) market globally.
In FY25, the total equipment sales reached 1,40,191 units, a rise from 1,35,650 units in FY24. Domestic sales grew modestly by 2.7% to 1,26,961 units, while exports surged to 13,230 units from 11,990 units in the previous fiscal year. The numbers underline both the growth potential and the challenges of the CE sector, as domestic performance was affected by macroeconomic and political headwinds.
Speaking on the results, Mr. V. Vivekanand, President of ICEMA and Managing Director of Caterpillar India, remarked, “The 3% growth in FY25 demonstrates the resilience of India’s construction equipment industry, particularly in challenging domestic market conditions. While we faced headwinds during the election period that impacted domestic demand, the remarkable 10% surge in exports validates the global competitiveness of Indian-manufactured equipment.” He added that the industry is strategically placed to meet higher demand in the coming years, leveraging export momentum and enhanced manufacturing capabilities.
Segment Performance Reflects Market Leadership
The Earthmoving Equipment segment continued to be the backbone of the industry, holding a commanding 71% share of total sales with 99,159 units sold—reflecting a 6% growth. Within this segment, Backhoe Loaders remained dominant with 53,133 units, accounting for 54% of segment sales. Crawler Excavators followed with 35,816 units (36% share).
Material Handling Equipment, the second-largest segment, contributed 17,050 units to the total. Concrete Equipment registered a 3% year-on-year growth with 14,473 units sold. Road Construction Equipment recorded 7,002 units, while the Material Processing Equipment segment reached 2,507 units, showing steady contribution despite sectoral slowdowns.
ICEMA also highlighted that 98% of the construction equipment sold in the domestic market was manufactured in India, underscoring the country’s self-reliance and production strength in the sector.
Domestic Challenges and Strategic Shifts
Despite a stable headline growth rate, industry insiders pointed to deeper concerns. Net domestic sales growth, after excluding non-OEM exports, was just 2%, suggesting a stagnation in core domestic demand. A key factor impacting sales was the general election cycle, which traditionally results in delays in government project execution and spending.
Mr. Deepak Shetty, President Designate of ICEMA and CEO & Managing Director at JCB India, noted that FY25 was a year of “strategic repositioning” for the sector. “Elections, rising input costs, and the enforcement of new emission standards have adversely affected the industry’s growth momentum. However, the nearly 10% growth in exports helped cushion the impact,” he explained.
Mr. Shetty emphasized that as India ascends as the fourth-largest economy globally, the continued focus on infrastructure development is vital. He stressed the need for broader growth drivers beyond roads and highways to ensure a more stable and sustainable industry growth path, and called for greater government support to enhance investment and job creation.
Export Momentum and Global Competitiveness
The industry’s export strength emerged as a crucial buffer against weak domestic conditions. Mr. Jaideep Shekhar, Convener of ICEMA’s Industry Analysis & Insights Panel and Managing Director of Terex India for APAC & EMEAR, stated that the robust 10% export growth in FY25 “showcases the maturity and competitiveness of India’s CE ecosystem.” He emphasized that this export-led growth was possible due to consistent quality, competitive pricing, and a favorable global market perception of Indian manufacturing.
Ms. Seema Gupta, Director General of ICEMA, highlighted the volatility in demand due to general elections and emission norm transitions. While some segments like material handling and processing registered negative growth, she commended the overall resilience of the industry and reiterated ICEMA’s commitment to working with the government and stakeholders for long-term development.
Future Prospects and Policy Needs
Looking ahead, the CE industry is cautiously optimistic. With expected economic recovery and increased infrastructure spending, demand is likely to rise. However, the industry leaders called for timely policy interventions to address key concerns: ease of financing, raw material availability, and execution efficiency in public projects.
Government support in terms of incentives, stable regulations, and increased capital spending in infrastructure will be vital in translating future demand into actual sales growth. Export-oriented strategies, digital integration, and skill development will also play a pivotal role in sustaining growth and enhancing India’s role in global CE markets.
About ICEMA:
The Indian Construction Equipment Manufacturers’ Association (ICEMA) represents more than 95% of the construction equipment manufactured and sold in India. The association advocates for the industry through policy engagement, research, and collaboration, promoting its growth and competitiveness on both national and international fronts.
