India Plans Incentive Plan for Local Construction Equipment

New Delhi - The Indian government is preparing an incentive scheme worth ₹14,000–16,000 crore (USD 1.7–1.9 billion) to promote domestic manufacturing of construction equipment, including tunnel boring machines (TBMs), cranes, and specialized rigs. The move aims to strengthen infrastructure development and reduce dependence on imports.

Currently, nearly half of India’s construction and mining equipment components are imported from China, Japan, South Korea, and Germany. The domestic sector saw 3% export growth in FY25 but a 1% decline in domestic sales in Q1 of the current financial year.

Mr. Manish Mathur, CEO of Ekka, said, “Encouraging local manufacturing is crucial to strengthen India’s construction and mining ecosystem,” said

Reliance on imports has created supply chain risks for large-scale projects, with even minor delays affecting deadlines. EPC companies are managing this through equipment rotation, supplier partnerships, and risk-sharing contracts.

ICRA projects India’s localization share in construction and mining equipment could rise from under 50% to 70–80% in the next 5–7 years, creating a $25 billion annual market and $3 billion in forex savings.

Officials expect strong demand for TBMs and cranes for metro, bullet train, and port projects. A dedicated production-linked incentive (PLI) scheme for heavy construction equipment is being considered to further boost domestic manufacturing.

India aims to quadruple port capacity to 10,000 MTPA by 2047, expand high-speed road corridors to 200,000 km, and increase metro and bullet train networks, making local equipment production critical for timely project execution.

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