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India’s construction equipment industry could grow from around The most immediate application is predictive intelligence.
$9.5 billion today to approximately $45 billion by 2035, creating Connected equipment generates large volumes of information
significant demand for the thousands of components and on operating hours, fuel consumption, component health and
systems that go into modern equipment. machine utilisation. AI can identify patterns within this data,
Policy could provide further momentum. The proposed $1.2-billion helping predict potential failures, flag inefficient operating
incentive programme for construction and infrastructure practices and improve maintenance planning. The objective is
equipment is expected to encourage higher domestic value to move from reacting to downtime to anticipating it.
addition and attract around $1.8 billion in fresh investment over The next frontier is physical AI. Unlike conventional software-
seven years, with an emphasis on technologically advanced based AI, physical AI enables machines to interpret the real world
equipment and capabilities. through cameras, sensors and real-time data processing—and
For OEMs, the benefits of long-term supplier development are translate that understanding into physical action. This has
already evident. JCB India, for instance, has achieved more than particular relevance for construction, where machines operate
95% indigenisation in its India-made backhoe loaders, supported on constantly changing terrain and alongside people, materials
by close to 380 domestic suppliers. Replicating that depth across and other equipment.
advanced hydraulics, electronics, sensors and connected Globally, manufacturers are beginning to explore both ends of
technologies will require fresh investment in manufacturing, this spectrum. Komatsu is applying AI across manufacturing,
testing and engineering. service and equipment operations, including anomaly
The opportunity, however, is larger than local content. India’s detection, predictive maintenance and computer vision. Its 2026
real localisation advantage will come from building a supplier partnership involving EARTHBRAIN and AIM Intelligent Machines
ecosystem capable of designing, developing and manufacturing takes the technology further towards autonomous operation
increasingly complex systems at competitive scale. That is what of bulldozers and hydraulic excavators. The initiative combines
will turn localisation from a manufacturing metric into a lasting Smart Construction’s digital terrain and project data with physical
competitive strength. AI capable of interpreting real-world conditions and supporting
machine decision-making.
THE AI ADVANTAGE This is particularly relevant to construction because traditional
AI is adding a new dimension to construction equipment: automation performs best in predictable environments. Jobsites
the ability to learn from how machines and projects actually are rarely predictable. Greater machine awareness could help
perform. For decades, equipment competition has centred on equipment respond to changing terrain, obstacles and operating
productivity, reliability, fuel efficiency and lifecycle costs. Those conditions.
fundamentals remain unchanged. What AI adds is the ability to Caterpillar is pursuing similar capabilities across connected
turn machine and project data into faster and better decisions— fleets, machine intelligence and autonomy. Its Cat AI Assistant,
on maintenance, utilisation, safety and site productivity. introduced in 2026, makes equipment and service information

18 CONSTRUCTION OPPORTUNITIES|SEPTEMBER 2026