CT Logo

Construction equipment generally refers to the relatively heavy machines/heavy-duty vehicles that are specially designed for executing construction (or demolition) tasks, mainly earthwork operations.

An efficient, accurate, easy, and cost-effective method for the construction of complex and high-quality infrastructure is possible only with the help of construction equipment.

Construction equipment (CE) can be classified into four groups –

• Earth moving, 

• Road Construction, 

• Concrete 

• Material Handling Equipment. 

Earth moving equipment the largest group, followed by concrete equipment and material handling equipment.

 

India's earth moving and construction equipment industry has enjoyed strong growth over the last seven years as a result of rapid economic development in the country.

 

The earth moving and construction equipment is one of the most important sectors which forms around 7% - 8% of national gross domestic product (GDP). It is one of the largest contributors to economic activity, following the agriculture sector in India. Hence it acts a key driver for various infrastructure development and to create growth opportunities to various other industries in the economy.

The construction equipment industry by its tremendous growth over years paves way for valuable FDI inflows and attracted various international players. It is the sector which gives either direct or indirect employment to more than 30 million people in the country and hence it's highly labor-intensive. Among the total infrastructural investment, around 60% accounts for construction equipment.

During the last two decades, the earth moving and construction equipment industry has made enormous progress and grown both in size and diversity.

The Construction industry of India is an important indicator of the development as it creates investment opportunities across various related sectors. The construction industry has contributed an estimated  6708 billion to the national GDP in 2011-12 (a share of around 9%). [1] The industry is fragmented, with a handful of major companies involved in the construction activities across all segments; medium-sized companies specializing in niche activities; and small and medium contractors who work on the subcontractor basis and carry out the work in the field. In 2011, there were slightly over 500 construction equipment manufacturing companies in all of India.[2] The sector is labor-intensive and, including indirect jobs, provides employment to more than 35 million people.[3]

Though there is tremendous scope for the Earthmoving Equipment in India the country suffers from some bottlenecks which impedes the growth of this Industry.

Among some causes for the inertias are:

1. Issues of land acquisition and also availability of the land for various infrastructure developments.

2. Various project bottlenecks like delays in project approval or other Regulatory issues and environmental concerns puts some barriers in construction equipment sale.

3. Timely availability of raw materials.

4. Delays related to forest and environment clearance have an impact on infrastructure projects.

5. Deviations in projected cash flow from the projects.

6. Financing options are limited, and payment terms for first-time users are often unfavourable.

7. Only few government incentives to develop skilled workforce. Hence to rule out the issue and upgrade the skills of the workers, the major construction equipment companies, has to establish costly training centers.

8. Need for pro-development policies from the government to bring about rapid execution of planned projects without any delays.

Indian Constructions and Equipment market has a robust potential for growth, having been supported by the government investments in improving infrastructure and housing demands. It is well anticipated that Indian economy good and the GDP is currently US$1.3 trillion, making it the 8th largest economy in the world, and the GDP is expected to grow about 9-10% in next 10 years.

India's promising economic conditions paves way for lots of global entrants in ECE sector. Those global key players in the construction equipment market not only establish manufacturing facilities in India, but they also do ensure they have a strong distribution channel that enables them to reach all through the country even to the more remote parts of the nation.

Thus global entrants, joint ventures, FDI inflows, Infrastructural Investments, Government Initiatives and policies will act as the backbone for the earthmoving and construction (ECE) Industry, and would strive to make the $3billion industry reach the peaks with $16-20 billion market by 2020.a