India Construction Equipment Industry ICEMA Reports FY26 Demand Slide

Recently, the India Construction Equipment Industry ICEMA data has revealed a challenging start to FY 2025–26, with domestic equipment demand contracting even as exports provide partial relief. The sector, a backbone of India’s infrastructure ecosystem, has been impacted by slower project execution, financing challenges, and a cautious investment climate across key construction segments.
According to figures released by ICEMA, the official body for industry statistics, domestic construction equipment sales declined from 89,244 units in the year-to-date period of FY 2024–25 to 81,566 units during April to December of FY 2025–26. This represents a 10 percent contraction driven by muted infrastructure activity, approval delays, and limited short-term demand across multiple equipment categories.
India Construction Equipment Industry ICEMA Q3 FY26 Performance
The India Construction Equipment Industry ICEMA numbers show that the slowdown extended into the third quarter of FY26. Total industry volumes, including domestic sales, OEM exports, and unauthorized exports, reached 35,891 units, reflecting a 9 percent year-on-year drop compared with Q3 FY25. The weakness was broad-based and visible across nearly every equipment class.

• Earthmoving equipment recorded 25,715 units, down 9 percent, as road, rail, and urban projects progressed more slowly than anticipated.

• Material handling equipment fell 10 percent to 4,306 units, mirroring weaker logistics and construction activity.

• Concrete equipment declined 9 percent to 3,335 units amid subdued real estate development.

• Road construction equipment slipped 7 percent to 1,942 units despite long-term infrastructure targets.

• Material processing equipment remained comparatively resilient with 593 units, down only 1 percent.

India Construction Equipment Industry ICEMA Export Momentum
While domestic demand remained under pressure, the India Construction Equipment Industry ICEMA export performance stood out as a stabilizing force. Overseas shipments rose by 28 percent during the first nine months of FY26, highlighting India’s improving competitiveness in global construction equipment markets.
This export growth helped limit the overall industry decline to about 5 percent, with total sales at 94,035 units versus 98,977 units a year earlier. The divergence between falling local demand and rising exports reflects both domestic constraints and expanding international opportunities for Indian manufacturers.
Unauthorized Exports Distorting the Market
ICEMA has also flagged unauthorized exports as a growing industry risk. In these cases, equipment sold in the Indian market is exported without informing OEMs or financing institutions, particularly in backhoe loaders and excavators. This creates repayment risks for lenders and skews reported market data.
Industry experts warn that excluding these unapproved shipments would show an even steeper drop in legitimate domestic demand, underlining the true scale of the slowdown in on-ground activity.
Factors Behind the Domestic Slowdown
Multiple structural and cyclical factors are weighing on domestic sales across the India Construction Equipment Industry ICEMA landscape.
The transition to CEV Stage V emission standards has temporarily affected equipment values and buyer confidence, even though it strengthens India’s export prospects. At the same time, slower government project awards, especially in highways, railways, and large infrastructure works, have reduced immediate equipment requirements.
Financing challenges have compounded the issue, with lenders becoming more cautious amid concerns over loan defaults linked to unauthorized exports and slower project execution.
Industry Outlook and Budget Expectations
ICEMA leadership remains cautiously optimistic. Deepak Shetty of JCB India highlighted that infrastructure-led growth remains the industry’s foundation, while Ramesh Palagiri of Wirtgen India pointed to strong exports and the potential for a rebound if project awards accelerate and capital expenditure increases in the upcoming Union Budget.
Vivek Hajela of L&T Construction & Mining Machinery added that although road construction has slowed due to land and approval delays, the pipeline of sanctioned projects remains robust and could translate into stronger demand once execution improves.
Looking ahead, industry stakeholders are focused on three priorities:

• Higher infrastructure capital expenditure to stimulate project activity.

• Faster government contract awards across key segments.

• Policy support for localizing supply chains in line with the Atmanirbhar Bharat vision.

With coordinated policy action, improved execution, and sustained export growth, the India Construction Equipment Industry ICEMA expects demand conditions to stabilize and gradually recover through 2026.