India’s construction-equipment industry is set for a muted recovery, with volumes expected to rise only 2–4% in fiscal years 2025-26 (FY26) and 2026-27 (FY27), according to CRISIL Ratings.
CRISIL’s analysis attributes the slow growth to weak domestic demand, as flagship sectors such as road construction and real estate momentum moderate. For instance, domestic demand already constitutes around 90% of industry volume, making the sector particularly vulnerable to domestic headwinds.
While volumes are expected to remain largely flat, the revenue side looks somewhat healthier: the agency projects 6–8% annual growth in revenue over the same period. The moderation in volume growth is expected to be offset by selective price increases and stronger export realisations.
One key structural driver noted by CRISIL is the implementation of the CEV-V1 emission norms (from January 2025), which have elevated compliance costs by around 12–15%. Although this has increased cost pressures, it has also enhanced overseas acceptability of Indian-manufactured equipment and improved export potential.
On the demand side, the pace of road construction is expected to decline to 23-25 km per day in FY26 from 34 km per day in FY24—reflecting slower project awards, unpredictable monsoons and budget execution challenges.
CRISIL further notes that among equipment types, earthmoving machinery dominates (70% of volumes), followed by material-handling (12%), concrete equipment (10%) and road/processing equipment
