After years of watching cheaper Chinese machinery dominate the market, the government is now considering a safeguard duty on heavy cranes and crawler cranes, along with sales incentives, to encourage local manufacturers to increase production.
According to two officials aware of the matter, the Ministry of Heavy Industries (MHI) is working on a plan to reduce import dependency in the billion-dollar market just as demand for construction and infrastructure equipment is surging across India.
This takes on significance as India’s $8.55 billion construction machinery market remains heavily dependent on imports – particularly from China – despite the government’s push for self-sufficiency in manufacturing.
Dependency underscores persistent cost disadvantages, supply chain gaps and limited domestic scale, even as policymakers and industry bodies emphasize localization and export competitiveness to meet growing infrastructure demand.
Duty on 70+ tons
MHI is currently evaluating a proposal for protective duties for cranes and crawler cranes with a capacity above 70 tonnes, one of the officials quoted said.
“Imposition of safeguard duties is a lengthy process, it has to be approved by the concerned ministry and then by the finance (ministry). But MHI is currently considering one such proposal for crawlers and cranes above 70 tonnes,” the official said.
Once approved, the proposal will move to the Directorate General of Trade Remedies (DGTR) under the Ministry of Commerce for investigation. Before recommending any duty to the finance ministry, the DGTR will assess whether the imports are injuring the domestic industry.
Incentives linked to sales
In parallel, MHI is proposing a sales-based incentive system to encourage domestic production of equipment and parts that are currently imported.
“As part of the plan, MHI is also reviewing a list of components that are commonly used to manufacture construction equipment but are often imported to provide fiscal soda for local manufacturing,” said a second official.
The ministry started working on the scheme in August and shared a note with industry stakeholders on the revenue-based incentive model, according to an MHI statement issued on September 10.
Email queries sent to MHI, the Union Ministry of Commerce and Industry and the Union Finance Ministry on November 10 remained unanswered.
Chinese import
India’s $8.55 billion construction machinery market (Mordor Intelligence) continues to be heavily dependent on imports – especially from China.
“Chinese imports currently account for more than 20% of India’s construction machinery market as they offer cheaper options than Indian manufacturers. Excavators and other similar equipment from China cost slightly less than the Indian-made variants, and contractors often prioritize cost savings over quality and durability,” said Santhosh Kumar, vice-chairman of ANAROCK Group, a property and real estate consultancy.
Chinese manufacturers often sold construction equipment in India with lines of credit, making them more viable, the second official said.
Construction boom
India’s construction market is worth $0.74 trillion in 2025 and is likely to grow to $1.03 trillion in 2030, according to estimates by Mordor Intelligence.
According to ANAROCK’s Kumar, this development comes as India’s demand for construction machinery has grown over the years.
“There has been a massive increase in demand for construction machinery in India. This is logical given the pace of development in the country,” he said, adding that the country is seeing rapid development of housing as well as retail and commercial space.
The value of residential sales in the nation’s top seven cities is likely to rise 19% in FY26 from the previous fiscal, completions of new commercial office projects in the top seven cities saw a 15% jump in the first nine months of 2025 – from approx. 34.07 million sq ft in 9M 2024 to 39.21 million sq ft in 9M 2025 and retail space deployment (mall) showed a 155% increase to 2.8 million sq ft in H1 2025 from 1.1 million sq ft in H1 2024 as per ANARO estimates.
“Infrastructure projects such as highways and railways in Bharatmala account for more than 42% of the demand, while mining and quarrying accounts for about 20%,” Kumar said. “Government spending on projects such as the National Infrastructure Pipeline and PM Gati Shakti remain key drivers of demand.”
“Chinese equipment manufacturers have an edge mainly because of their scale, which enables lower prices,” said Vaibhav Dange, co-founder of Build India and a former advisor to NHAI. “In specialized areas such as metro tunnel construction, Chinese firms are still leading, while domestic players are building capacity.”
He added that mining and heavy engineering are likely to be high-demand areas requiring more advanced domestic manufacturing capabilities.
Export promises
India’s construction machinery industry grew by 3% year-on-year in FY25 and sold 1,40,191 units, according to the Indian Construction Equipment Manufacturers Association (ICEMA).
While domestic market growth remained muted at 2.7%, overall industry performance was better thanks to a strong 10% increase in exports, which strengthened India’s position as the world’s third largest construction machinery market.
Earthmoving machines dominated with a 71% market share, followed by handling and concrete equipment segments.
Political pressure
Looking ahead, the industry expects demand for construction equipment to grow due to infrastructure spending and an improving economy. But it said policy support – including steps to boost domestic demand, ease financing and address supply chain issues – would be key to sustaining this momentum, ICEMA said in a statement.
The association added that India’s relatively higher manufacturing costs compared to China, Japan and other Southeast Asian economies continue to pose a challenge. These observations were part of an ICEMA report assessing trends between FY23 and FY25.
A query sent to ICEMA President and JCB India MD & CEO Deepak Shetty remained unanswered as he is currently traveling abroad. JCB India holds about a 50% share of the domestic construction machinery market, according to data from the Federation of Automobile Dealers Associations.
Other key Indian players include Action Construction Equipment Ltd, Escorts Kubota Ltd, Ajax Engineering Ltd and Caterpillar India Ltd among others.
