Govt plans Rs 16k cr boost for construction equipment sector

10 Sep 2025 CW Team

The Centre is finalising an incentive package worth Rs 14,000–16,000 crore to promote domestic manufacturing of heavy construction equipment, including tunnel boring machines (TBMs), cranes and specialised rigs, reported The Economic Times. The move aims to reduce reliance on imports and support India’s infrastructure growth.

Inter-ministerial discussions are underway, with the scheme expected to be launched in the next financial year. Nearly half of India’s construction and mining equipment components are currently imported, largely from China, Japan, South Korea and Germany.

Industry leaders say local manufacturing is critical for upcoming mega projects such as high-speed rail, metro networks, highway corridors and new ports. Rahul Agarwal, CFO of Patel Engineering, highlighted that dependence on overseas suppliers often leads to project delays due to global supply chain disruptions.

Manish Mathur, CEO (Cranes) at ACE, noted that the sector recorded only 3% growth in FY25, with domestic sales declining in the first quarter. A dedicated incentive scheme, he said, could help build resilience and boost competitiveness.

According to ICRA, indigenisation in the sector could rise to 70–80% in the next five to seven years from less than half today, creating a Rs 25,000 crore market and saving about Rs 3,000 crore annually in foreign exchange.

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