The Changing Winds of Road Construction and Equipment Sector -

The Changing Winds of Road Construction and Equipment Sector.  The infrastructure sector is the key driver for the Indian Economy propelling India’s overall development with the help of the government initiated policies that would ensure the time-bound creation of excellent infrastructure in the country. The Government of India is taking every possible initiative to boost the infrastructure sector where it is expected to invest highly in the infrastructure sector highways, renewable energy, and urban transport. In 2017 Indian infrastructure witnessed 91 M&A deals worth US$ 5.4 billion. According to IBEF Research Foreign Direct Investment (FDI) received in Construction Development sector (townships, housing, built-up infrastructure and construction development projects) from April 2000 to June 2018 stood at US$ 24.87 billion, according to the Department of Industrial Policy and Promotion (DIPP).  India is witnessing significant interest from international investors in the infrastructure space where an investment worth Rs 50 trillion (US$777.73 bn) in infrastructure by 2022.

The Construction Equipment Sector

The construction equipment industry is today pegged at $4.3 billion in value with the Feedback Business Consultancy report. They had forecasted that industry volumes had grown up to over            1,20,000 units by 2021 growing at a CAGR of 20 percent given with the fact that India has an infra-deficit and needs about $7 trillion. It had also hit a rough patch during the three years FY13-FY16 when infrastructure and road building activities were subdued. The current industry volumes are close to 75,000 units where policy changes in the infrastructure segment are expected to boost the Equipment industry to an estimated $ 7.5 billion by 2020. Moreover, rapid urbanisation, increasing foreign investments and surging demand for customised equipment are few of the other major factors expected to boost demand for construction equipment in India in the coming years. Increasing number of public-private partnerships and government initiatives such as smart city development projects would also aid the construction equipment market in India during the forecast period. Loaders, excavators, and compactors dominate the road sector with backhoe loaders singularly contributing the largest chunk of the sales pie- 43 percent growing 10 percent last fiscal. Winds of change are blowing across the Indian construction equipment sector.

National and International Initiatives

India’s national highway network is expected to cover 50,000 km by 2019. National highway construction in India has increased by 20 percent year-on-year in 2017-18. India and Japan have joined hands for infrastructure development in India’s north-eastern states and are setting up an India-Japan Coordination Forum for Development of North East to undertake strategic infrastructure projects in the northeast. Crisil Research estimates project execution by the National Highways Authority of India (NHAI) at 3,070 km in FY18 and 3,300 km in FY19 from 2,625 km in FY17. A BofA Merrill Lynch (BofAML) 2018-19 report has given a positive outlook for the highway sector with the government fixing the national highways project award target at 20,000 km for FY19 up 25 percent over the previous year.

For more updates on news, articles, features on architecture, and interiors visit: www.

more recommended stories