India’s mining and construction equipment (MCE) industry is expected to recover strongly in 2026–27, with volumes projected to grow 8–10% year-on-year to around 1.5 lakh units, according to rating agency ICRA. The forecast follows a 2% decline in industry volumes during FY26.
The recovery is being supported by improving infrastructure project execution, higher state-level infrastructure spending and continued government capital expenditure. Government capex increased by nearly 30% during the first four months of FY27, while MCE retail registrations also turned positive in July.
Domestic demand remains the industry’s main driver, accounting for more than 80% of volumes. Exports are also gaining importance, rising 34% year-on-year during the first five months of FY27. Earthmoving equipment, including backhoe loaders and crawler excavators, has been among the key contributors to demand.
However, higher steel prices, logistics expenses and imported component costs could put pressure on manufacturers’ profitability. ICRA expects operating margins for its sample of 14 large MCE companies to moderate to 6–8% in FY27, compared with 8.4% in FY26.
The agency expects revenue for these companies to grow 11–13% in FY27, supported by volume recovery, exports and a favourable product mix. Despite cost pressures, ICRA has maintained a stable outlook for the sector.
