India Plans Incentive Scheme for Construction Equipment

New Delhi – The Indian government is finalising an incentive package worth USD $17–19 billion (INR 14,000–16,000 crore) to boost domestic production of construction machinery, aiming to cut reliance on imports and strengthen the country’s infrastructure drive.

Currently under inter-ministerial review, the scheme is expected to be announced in the upcoming financial year. It will target the manufacture of critical equipment such as tunnel-boring machines (TBMs), large cranes, and specialised rigs, which are vital for India’s infrastructure projects.

Nearly half of India’s construction equipment components are imported from countries like China, Japan, South Korea, and Germany. Industry experts warn that this dependency often causes supply delays during global demand surges or disruptions.

Mr. Rahul Agarwal, CFO at Patel Engineering Ltd, noted that shortages of such machinery remain a major obstacle for infrastructure developers.

If implemented, the scheme could help ease supply bottlenecks, accelerate project execution, and improve resilience against global supply chain shocks. It also aligns with the government’s “Make in India” and “Atmanirbhar Bharat” goals, creating new opportunities for domestic manufacturers and advancing engineering capabilities.

Seen as a strategic step for India’s construction sector, the initiative is likely to play a key role in reducing long-term dependence on foreign suppliers.

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