This document summarizes the construction equipment industry in India. It outlines that the industry has been growing at around 11% annually and is projected to reach $7.5 billion by 2020, driven by increased investment in infrastructure like roads. However, it faces challenges like lack of standardization of taxes across states and high duty rates. Opportunities for growth include expanding skills training programs and increasing localization of production. The Confederation of Indian Industry works to represent the industry and facilitate its development goals.

1. Construction Equipment Industry

2. © Confederation of Indian Industry
 Background
 Growth Drivers
 Key challenges
 Growth Opportunities
 Any other information
 About the Association / CII
2
Table of Content

3. © Confederation of Indian Industry 3
Background
• ICEMA is an industry association representing earthmoving and
construction equipment industry in India. ICEMA presently represents
65 leading companies who manufacture, trade and finance a variety of
products such as hydraulic excavators, wheel loaders, backhoe loaders,
motor graders, vibratory compactors, cranes, dumpers, tippers,
forklifts trucks, dozers, pavers, batching plants, diesel engines, etc.
• Key equipment categories manufactured by the construction
equipment industry are (a) earthmoving & road construction
equipment (b) concrete equipment (c) material handling equipment
(d) material processing equipment.
Construction
Equipment
Industry

4. © Confederation of Indian Industry 4
Growth Drivers for the sector
Policy (Growth
Drivers)
Road construction still continues to be the only sector
contributing to this growth.
• Rate of construction of national highways increased from 16.5
kms / day during 2015-16 to 21kms / day during 2016-17.
• The government had set an ambitious target of awarding
close to 25000 kms of roads for 2016-17.
• This might not be achievable, as per current status expecting
the allocation on roads to be high for the upcoming fiscal as
well.
At status quo, the industry is expected to reach USD 5 billion by
the year 2020; but with the right government push, this number
could very well touch USD 7.5 -8 billion.
Other Sectors
• There has been a drop in coal production owning to lower
demand.
• Real estate, post demonetisation, yet to pick up.
• Iron ore sector active in limited pockets.
• Railway projects still at a nascent stage considering the
government is planning a huge investment in this sector.

5. © Confederation of Indian Industry 5
Growth Drivers for the sector
Latest Industry
Trends
An optimistic projection of the industry by 2025 could see the it touch close to USD 18 billion
11.8%7.5% 16.9%
Pessimistic
Realistic
Optimistic
* Numbers have been rounded off to the nearest zero
Expected growth
Expected Volume
Equipment CAGR
Earthmoving 12.5%
Mining 4.3%
Concrete 12.1%
Material Handling 8.2%
Road 12.8%
Material Preparing 11.2%

6. © Confederation of Indian Industry 6
Challenge 1
Inclusion of Earthmoving & Construction
Equipment as a product category under
“Merchandise Export from India Scheme
(MEIS)”
Challenge 2
Standardize Road Tax Regulations across
States and mandate national registration
for Road Tax (12%)
Challenge 3
Tax Rate under GST- Construction
Equipment are used for infrastructure
development which is basic requirement
for a developing country like India. Under
the proposed taxation structure, the
effective GST rate needs to be kept low
Challenge 4
Duty Exemptions- Review of the list of
equipment exempted from import duty:
The list was first introduced vide
notification no. 21/2002 dated 1st March,
2002. Since then lot of equipment have
been manufactured locally. This list needs
to be amended to remove the items which
are presently manufactured in India.
are presently manufactured in India.
Key Challenges

7. © Confederation of Indian Industry 7
Opportunities
• Growth Potential: The Indian ECE industry has the potential to grow at 11% percent CAGR
to reach USD 7.5 billion by 2020 with expected sales volume to increase from over 52,000
units in 2016-17 to around 1,00,000 units in 2020-21.
• Make-in-India: FDI and setting up of localization programs by global OEMs, to support
equipment capacity and relevant technology to build future India.
• Skill India: Industry will need to absorb skilled operators and need additional 2-2.5 million
skilled operators, over and above blue and white collar workforce in the plants.
• Customers will increasingly look at mechanization and usage of specialized equipment to
meet project deadlines and address labor shortages.
Growth Opportunities

8. © Confederation of Indian Industry 8
Key Initiatives of the Association
 Closely working with DHI for setting up Test Centre for Construction
equipment Industry
 CEMM Equipment Act for Off-Highway equipment. Draft CEMM Bill has
been prepared by PLR Chambers on the basis of inputs provided by ICEMA
members
 ICEMA has set up Infrastructure Equipment Skill Council (IESC) in
collaboration with NSDC to train over 20,00,000 operators in next 7-8 years.
Setting up new
standards
Working with
other global
counterparts
 ICEMA interacts closely with its counterpart associations in Japan, Korea, USA,
Europe and China. Common issues are discussed in the International
Associations Committee (IAC) meetings and to bring out worldwide demand
projection surveys.
 ICEMA is actively involved in organizing major International Construction
Equipment Exhibition and sending delegation to Bauma, Munich and CONEXPO,
Las Vegas.
 Interacts closely with the concerned Ministries / Government Departments /
Border Roads Organization on a regular basis for supplying equipment to
various infrastructure projects
 Brings out Industry Report from time to time which provides growth trends of
CE industry and long term business outlook .
Others

9. © Confederation of Indian Industry 9
CII
The Confederation of Indian Industry (CII) works to create and sustain an environment conducive to the development of
India, partnering industry, Government, and civil society, through advisory and consultative processes.
CII is a non-government, not-for-profit, industry-led and industry-managed organization, playing a proactive role in India's
development process. Founded in 1895, India's premier business association has over 8,300 members, from the private as
well as public sectors, including SMEs and MNCs, and an indirect membership of over 200,000 enterprises from around
250 national and regional sectoral industry bodies.
CII charts change by working closely with Government on policy issues, interfacing with thought leaders, and enhancing
efficiency, competitiveness and business opportunities for industry through a range of specialized services and strategic
global linkages. It also provides a platform for consensus-building and networking on key issues.
Extending its agenda beyond business, CII assists industry to identify and execute corporate citizenship programme.
Partnerships with civil society organizations carry forward corporate initiatives for integrated and inclusive development
across diverse domains including affirmative action, healthcare, education, livelihood, diversity management, skill
development, empowerment of women, and water, to name a few.
The CII theme for 2017-18, India Together: Inclusive. Ahead. Responsible emphasizes Industry's role in partnering
Government to accelerate India's growth and development. The focus will be on key enablers such as job creation; skill
development and training; affirmative action; women parity; new models of development; sustainability; corporate social
responsibility, governance and transparency.
With 66 offices, including 9 Centres of Excellence, in India, and 10 overseas offices in Australia, Bahrain, China, Egypt,
France, Germany, Singapore, South Africa, UK, and USA, as well as institutional partnerships with 344 counterpart
organizations in 129 countries, CII serves as a reference point for Indian industry and the international business
community.