India is preparing a $1.2 billion incentive scheme to strengthen domestic manufacturing of construction and infrastructure equipment, aiming to reduce dependence on Chinese imports and boost self-reliance in the sector.
The proposed scheme is expected to attract approximately $1.8 billion in fresh investments over seven years. It will support the domestic production of high-value equipment, including tunnel boring machines (TBMs), firefighting systems and elevators used in high-rise buildings.
The initiative comes as India’s infrastructure sector expands rapidly, with growing demand for specialised machinery for metro rail networks, highways, tunnels and urban development projects. However, limited domestic manufacturing capacity has made the country reliant on international suppliers, particularly China.
The proposed incentives aim to encourage Indian manufacturers to invest in advanced technology, research and development, and local component production rather than simply assembling imported parts.
Companies such as BEML, Larsen & Toubro and Johnson Lifts could potentially benefit from the initiative.
India’s construction and infrastructure equipment market is currently valued at approximately ₹1 lakh crore, highlighting the significant growth potential for domestic manufacturers.
The proposed policy could strengthen India’s manufacturing ecosystem, create new industrial opportunities and improve supply-chain resilience. By encouraging indigenous production and technological advancement, the government aims to position India as a globally competitive hub for construction equipment manufacturing.
