28 March 2020

Construction Equipment

 

Heading back on track

 

India has become one of the key potential markets for construction equipment. Developing construction sector would act as a key catalyst for the growth of the construction equipment market in India. Regardless of the current slowdown dragged from the previous year’s condition, the growing trajectory of infrastructure projects, the inflow of foreign direct investment will boost the industry writes ROHAN AMBIKE.

 

 

India has become one of the key potential markets for construction equipment. Developing construction sector would act as a key catalyst for the growth of the construction equipment market in India. Rapid urbanization, growing population, increasing government spending in infrastructure projects, the inflow of foreign direct investment are the major drivers boosting the demand for construction equipment in the country.

 

In terms of equipment types, construction equipment market is mainly dominated by earthmoving equipment segments such as loaders, excavators and cranes. Earthmoving equipment segment acquired a key market in the overall market in 2018, owing to the increasing number of public-private partnerships and government initiatives such as smart city development projects. Moreover, with the rapid increase in infrastructure investment and industrial production, the earthmoving equipment segment contributes key revenues in India construction equipment market forecast period.

 

During Dec 2018, infrastructure sector witnessed PE/VC twelve deals worth 500 million and eight Rs.6,989 crore (US$ 1 billion) plus deals. PE/VC investments for infrastructure touched an all-time high of US$ 36.7 billion during January-August 2019. All villages in India will be connected through a road network by 2019 under Pradhan Mantri Gram Sadak Yojana (PMGSY) also to upgrade the 1,25,000 kms of road length over the next five years, the estimated cost of Rs.80,250 crore (US$ 12.03 billion) is envisaged under Pradhan Mantri Gram Sadak Yojana-III (PMGSY). Road building in India has become the second cheapest in Asia. In August 2017, a new Metro Rail Policy was announced to boost private investment in the sector. Metro rail network has touched 657 Km.

 

As per Union budget 2019-20, Metro rail network has touched 657 Km and Ministry of Railways have been allocated Rs.94,071 crores (US$ 13.46 billion) in 2019-20. The Government is also working on improving energy infrastructure in the country and investment opportunities worth Rs.20,96,700 crore (US$ 300 billion) will be available in the sector in the coming 10 years.

 

 

National highway construction sets a record of 31.87 km per day in December.

 

The infrastructure sector has become the biggest focus area of the Government of India. Under Union Budget 2019-20, Rs.4,41,704.8 crore (US$ 63.20 billion) was allocated to the sector. As per Union budget 2019-20, investment of Rs.5,000,000 crore (US$ 750 billion) is needed for railways infrastructure between 2018-30. In the Union Budget 2019-20, the Government of India has given a massive push to the infrastructure sector by allocating Rs.24,000 crore (US$ 3.4 billion) for the sector. For 2019-20, budgetary allocation for Ministry of Development of North Eastern Region has been increased to Rs.3,000 crore (US$ 429.25 million) as compared to Rs.2,629 crore (US$ 376.16 million) in 2018-19.

 

The eight infrastructure sectors that constitute 40.27 per cent of the index of industrial production (IIP) almost remaining at 0.2 per cent in June 2019. According to Department for Promotion of Industry and Internal Trade (DPIIT), Construction Development sector and Infrastructure Activities sector received FDI inflows amounting to US$ 15.33 billion and US$ 15.33 billion, respectively from April 2000 to June 2019.