The construction equipment industry registered a marginal decline of about two per cent in total sales in FY 2025-26, with overall dispatches dropping to 1,36,995 units from 1,40,191 units in the previous fiscal, industry body ICEMA said on Friday.

The dip was attributed to temporary domestic market challenges, including slower infrastructure execution and project delays, even as the sector demonstrated resilience backed by a robust 32 per cent surge in exports.

Speaking to reporters here, the Indian Construction Equipment Manufacturers' Association (ICEMA) President Deepak Shetty said that the marginal decline witnessed in the last financial year must be viewed in the context of slower infrastructure execution on the ground rather than any structural weakness in the industry.

"While Government capex allocations continue to remain at historically high levels, delays in project execution, land acquisition challenges and slower disbursement cycles impacted equipment demand during the year," Shetty said.

At the same time, the industry demonstrated resilience through a strong growth in exports, highlighting the rising global competitiveness of India-made construction equipment, according to Shetty.

"We remain confident about the industry's long-term growth trajectory driven by India's continued infrastructure development focus," he added.

Domestic sales declined by around 7 per cent during FY26 to 1,13,229 units from 1,21,301 units in FY25, reflecting a moderation in infrastructure execution and a cautious buying sentiment across sectors.

India continues to remain the world's third-largest construction equipment market, with the sector projected to reach $14.76 billion by 2030 at a CAGR of 8.3 per cent.

Earthmoving equipment continued to dominate the construction equipment market, accounting for about 71 per cent share at 97,236 units, registering a 2 per cent year-on-year (YoY) decline.

Material handling equipment clocked 15,290 units, down 10 per cent YoY, while concrete equipment remained broadly stable at 14,486 units with a marginal growth of 0.09 per cent.

Road construction equipment posted a positive growth of 6.3 per cent at 7,445 units, and material processing equipment registered a modest rise of 1.2 per cent at 2,538 units.

Domestic demand for infrastructure equipment faced multiple headwinds in FY26, including a seven-year low in national highway construction due to delays in land acquisitions and fewer project awards.

The Jal Jeevan Mission (JJM) also slowed amid moderated fund disbursements, while contractor payment delays squeezed liquidity across the sector, according to the industry body.

The implementation of CEV Stage V emission norms from January 2025 spiked equipment costs, exacerbated by the industry's heavy reliance on financing. Rising global commodity prices, particularly crude oil and bitumen, added further pressure in the latter half of the fiscal.

"India's infrastructure growth story remains strong, and timely execution of projects, faster implementation on the ground, and improved liquidity support for contractors will be critical in restoring growth momentum for the sector," Shalabh Chaturvedi, Vice President of ICEMA, said.

ICEMA is the apex body representing leading construction equipment manufacturers in India.

Published on May 8, 2026