Due to the consistent focus on the infrastructure investment by the Indian government in various sectors including road, power, urban development, railways, ports, aviation, urban transportations, and others, forces Off-Highway Research to update its previous growth forecast of Indian Construction Equipment industry for 2016.
Off-Highway Research in its latest forecast said that Indian Construction Equipment market is expected to see the 27 percent sales growth in 2016 and also predicts that this double-digit growth will continue to follow in 2017 and 2018, this should see sales volumes break the previous sales record of 72,197 units sold in 2011.
In its previous forecast, released in August, it had said Construction Equipment Industry in India would grow +20% this year to 58,465 machines.
As per the report, Indian construction equipment market is dominated by six types of equipment, mainly by Backhoe Loaders, Crawler Excavators, Mobile Cranes, Mobile compressors, Compaction Equipment and Wheeled Loaders and its project that these types of machines would account 94 percent of the CE market in 2016.
Indian construction equipment industry started reviving after the gap of four years, and as per projection of Indian Construction Equipment Manufacturers’ Association (ICEMA), the Indian CE industry would grow to USD 5 billion by FY2020.
The CE sales have been driven by the government focus on infrastructure investment. It is estimated that India needs an investment of Rs 31 trillion for its infrastructure development over the next five years. Indian power sector alone has a potential investment of USD 250 billion in the next 4 to 5 years.
In Budget 2016-17, Finance Minister, Mr. Arun Jaitley had announced the budgetary allocation of Rs 2.21 trillion for creating and upgrading the country’s infrastructure.
Earlier this year, Union Minister Mr. Nitin Gadkari had announced that the Indian government would invest Rs 25 trillion in roads, railways and shipping infrastructure over the next three years.
In the last two years, the Ministry of Road Transport and Highways, approximately awarded road projects worth Rs 2 lakh crore in the country and it planned to award works worth Rs 7 lakh crore in the next five years to develop National Highways in the country. In this fiscal, NHAI is set to award projects worth Rs 1 lakh crore and is also planning to bid 30,000 km of projects in next 2 to 3 years.
Ministry of Road Transport and Highways (MoRTH) sets a target to award 25,000 km of roads in the current financial year.
The government commitment towards infrastructure development shows optimism for further growth in Indian construction equipment industry.
Source: Information has been obtained from Off-Highway Research (KHL), ICEMA, and various media reports