The demand for construction equipment in India is expected to grow to US$ 9.9 billion by 2015, a compound annual growth rate (CAGR) of 24.1 per cent (from 2011). Revenues increased at a CAGR of 6.6 per cent during FY07-12 and is estimated to reach US$ 5.1 billion by FY12.It is further estimated to grow at a CAGR of 24.8 per cent on the back of rapid infrastructure development undertaken by the Government of India (GOI).
Investments in infrastructure are the main growth drivers of the construction equipment industry. The Planning Commission estimates total infrastructure spending to be about 10 per cent of Gross Domestic Product (GDP) during the 12th Five Year Plan (2012-17), up from 7.6 per cent during the previous plan (2007-12). The government 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 US$ 175 million as of January 2013.