Broad-basedgrowth in equipment sales is expected to resume this year, with the marketforecast to rise 10 per cent, according to a recent analysis by Off-Highway Research.This will be driven by a range of infrastructure investment plans.

The mostrecent high in the Indian construction equipment industry was in 2018. Themarket was disrupted in 2019 by the general election, which always causes adownturn in sales due to the legal requirement to suspend the award of publicworks contracts once the election is announced in case this is used as amechanism to curry undue favour with voters.

The marketsank further in 2020 due to the pandemic and only recovered modestly in 2021 asfurther Covid variants impacted the country. This continued into 2022 to someextent, but more significant was the impact of inflation, which increasedequipment prices and adversely affected the financial viability of constructionprojects.

As aresult, the market only achieved a modest 2.0 per cent rise in sales last year.However, within this disappointing overall picture, crawler excavator salesgrew 10 per cent, largely at the expense of backhoe loaders.

With ageneral election due in 2024, this year’s budget has a particularly strongemphasis on investment as Prime Minister Modi seeks a third term in office. Unfortunately,the election next year will temporarily derail growth and there will be furthermarket-specific disruption due to the introduction of CEV Stage-V emissionslaws in April 2024, notes Off-Highway in its analysis on the constructionequipment market in India.

However,Off-Highway Research remains bullish about the medium and long-term growthprospects in the Indian market, and expects equipment sales to resume theirascent from 2025 onwards.