The demand for construction equipment in India is expected to grow to US$ 6.3 billion by 2014, a compound annual growth rate (CAGR) of 19.3 per cent (from 2010). India is expected to be firmly established as the third largest market in the world for construction equipment as number of machines will grow to 114,165 in 2016.
Infrastructure investments are the main growth drivers of the construction equipment industry. The Planning Commission estimates total infrastructure spending of about US$ 428 billion during the 11th Five Year Plan (2007-12). The Commission plans to double India's infrastructure investments to about US$ 1 trillion for the 12th Plan (2012-17) - raising its share to Gross Domestic Product (GDP) from 7.8 per cent in FY12 to 10.8 per cent by FY17. The Government of India has granted sops, including a large number of special economic zones (SEZs), to the capital goods industry of which construction equipment is a part; especially with an impetus to increase exports.
Almost all global technology leaders in the construction equipment sector have a presence in India - either as joint ventures or with their own manufacturing or marketing companies. Cumulative foreign direct investment (FDI) inflows (since April 2000) into earth moving equipment reached USD170.3 million as of August 2012.