India’s construction equipment industry experienced a significant deceleration in fiscal year 2024–25, recording a growth rate of just 3 per cent, the lowest in its history. This downturn marks a stark contrast to the robust double-digit growth observed in the preceding years, where the sector expanded by 24 per cent in FY24 and 21 per cent in FY23.
The slowdown is attributed to multiple factors, primarily the imposition of the Model Code of Conduct during national and state elections, which restricted the announcement of new infrastructure projects. Additionally, delays in ongoing central and state initiatives and payment holdups to contractors further dampened demand for construction equipment.
Major players in the industry, including Caterpillar and JCB, reported a noticeable decline in machinery sales, reflecting the broader challenges faced by the sector. The Indian Construction Equipment Manufacturers Association (ICEMA) highlighted that the Rs 86,000 crore industry, crucial for large infrastructure projects, saw a considerable deceleration after years of robust growth.
Despite the current challenges, industry stakeholders remain cautiously optimistic about future growth prospects. The anticipated conclusion of the election cycle and the resumption of stalled projects are expected to revitalize demand in the coming fiscal year. However, the recent slowdown underscores the need for policy stability and timely execution of infrastructure initiatives to sustain momentum in the construction equipment sector.
