ICEMA: Roadmap to Progress for India's Construction Equipment Industry

ICEMA, the industry association of Indian Construction Equipment (CE) manufacturers, suppliers and other stakeholders, aims to take the Indian Construction Industry to the next level of growth by leveraging advanced technology, embracing sustainability, promoting circular economy, increasing localization to reduce its dependence on imports, making the supply chain more efficient, and empowering the industry with a well-trained workforce.

ICEMA, the industry association of Indian Construction Equipment (CE) manufacturers

ICEMA’s Technology Vision Roadmap 2035 developed for the Construction Equipment industry defines the guidelines for a tech-enabled CE industry and outlines the ways to achieve them. The ultimate aim is to make India self-reliant, grow the country's economy through infrastructure development across sectors, and modernize the Indian CE industry to make it a manufacturing hub for both national and international brands, and one of the largest industries in the world.

In the following pages, ICEMA President, Convenors and Heads of Various Panels set up by the Association, share insights with S.A.Faridi, on the advancements in the CE Industry for its future growth, as well as solutions for meeting the challenges in the present.

Economy & Domestic Production Capabilities

From your extensive experience in the Indian construction industry, what are your key takeaways regarding the mechanization of equipment and how is it addressing cost and schedule overruns?

V. Vivekanand: Many of the OEMs in the Construction Equipment industry have adopted technology pertaining to Industry 4.0; wherein modern machines are connected and even have autonomous capability to improve efficiency and productivity. As the industry continues to mature, we expect to see the next phase of mechanization, i.e., Industry 5.0. This new phase refers to people working alongside smart machines and robots helping humans work better and faster by leveraging advanced technologies like Artificial Intelligence, Machine Learning, Internet of Things (IoT), and Big Data analytics. Industry 5.0 thus aims to achieve a blend of both human and artificial intelligence to take safety, quality, productivity and efficiency to greater heights.

It is well known that CE machines are designed to work even on the harshest of job sites, like mines and hilly terrains, with their inherent hazards pertaining to work conditions. So, many jobsites have a mix of machines that work in tandem, while adapting to the site conditions. This adaptability can best be accomplished by a blend of human and Artificial Intelligence which is the foundation of Industry 5.0.

Managing Director, Caterpillar India
The CE Industry is poised for Industry 5.0 which will take safety, quality, productivity and efficiency in construction to greater heights.

V. Vivekanand - President, ICEMA, Managing Director, Caterpillar India

As India aims to become the 3rd largest economy by 2030, how can the CE industry contribute to faster and higher quality infrastructure development?

Deepak Shetty: India’s aspiration to drive economic growth and become the world’s third largest economy by 2030 is underpinned by the creation of a robust and dynamic infrastructure capable of meeting the needs of a fast-growing economy. The Construction Equipment industry, being a key enabler of infrastructure development, is transforming in response to the modern equipment requirements of the ambitious infrastructure projects of the government.

In this constantly changing demand scenario, the Construction Equipment industry is striving to strengthen its manufacturing processes and bring product innovation by integrating digitalisation and adapting to the latest technologies to build a resilient supply chain ecosystem.

ICEMA, as the apex body of the Indian Construction Equipment industry, takes pride in partnering with the government in enabling creation of this infrastructure to shape a Modern India.

Further, with the construction landscape in India evolving rapidly to align with global imperatives such as reduced ecological footprint, enhanced jobsite safety, and jobsite solutions based on increased automation and digitalisation, the demand profile for Construction Equipment is evolving in tandem with these developments.

As the country’s economy expands, new demand segments are emerging, requiring state-of-the-art construction equipment with greater versatility across applications, or customised for specialised functions, as well as machinery operating on alternate fuels. In order to meet the rapidly transforming demand for Construction Equipment, the CE industry players are adopting the latest technologies and innovations, to produce machines with higher levels of efficiency, productivity, safety and sustainability.

In tandem with the new age machines being produced to address the requirements of future infrastructure projects, the Indian CE industry is also proactively addressing the issue of shortage of skilled workforce to operate these machines by promoting operator skilling programs through Infrastructure Equipment Skill Council (IESC).

ICEMA CEO & Managing Director, JCB India
Creation of a world-class infrastructure is only possible with the deployment of world-class equipment that integrates digitalisation, is adaptive to latest technologies, has versatility across applications to undertake specialised functions, and can operate on alternate fuels.

Deepak Shetty - President Designate, ICEMA CEO & Managing Director, JCB India

ICEMA’s Technology Vision Roadmap 2035

How does ICEMA plan to foster technological advancement within the CE industry to enhance manufacturing capabilities and infrastructure develop- ment?

V. Vivekanand: ICEMA’s Technology Vision Roadmap 2035 for the CE Industry of India, released in August 2023, outlines the Industry’s action plan in the context of global trends, domestic requirements, and the regulatory framework, to ensure that the Indian CE industry stays ahead of the curve. As a guiding document for the entire CE industry, it lays down India’s view for the future in three S’s - Safety, Solutions and Sustainability.

Further, in order to emerge as the prime global manufacturing hub for Construction Equipment by the end of the decade, the Indian CE industry is focusing on the three C’s: Capacity, Capability and Competitiveness. Capacity to enable manufacturers meet the scale of demand that is likely to emerge in the coming years; Capability to manufacture products with quality that is at par or even better than global benchmarks; Competitiveness to position the Indian CE industry as the epicentre of manufacturing for the global CE industry.

ICEMA is making consistent efforts to strengthen the CE industry’s supply chain and is especially working with Tier 1 & 2 suppliers to strengthen their capacities. The Association is also working with policymakers to facilitate building of local capacity and capability through production-linked incentives for both OEMs as well as Tier 1 & 2 suppliers. These initiatives are aimed at enhancing infrastructure development by bolstering the manufacturing capabilities of the Indian CE industry.

ICEMA’s aim is to strengthen CE industry’s supply chain
ICEMA’s aim is to strengthen CE industry’s supply chain, facilitate building of local capacity and capability, and thereby enhance infra development.

V. Vivekanand

What are the primary challenges and strategies outlined in the Technology Vision Plan 2035 to align with India's infrastructure goals? What are the main targets set in this plan?

Dimitrov Krishnan: Besides providing guidance for the Indian CE industry to enable technology adoption, safety and sustainability, the Indian CE Technology Vision Plan 2035 also sets out a series of challenges and strategies to enable the industry in aligning with India’s infrastructure goals. The primary targets in the roadmap are:
  • To provide a comprehensive regulatory landscape for the industry, especially in the matter of addressing unregulated Off-Road Equipment. For instance, Crawlers used in key applications such as infrastructure projects, real estate, urban utility, and irrigation, remain untouched by safety and emissions regulations. With a more comprehensive regulatory framework, the Indian CE industry can usher in a new era of standardised governance.
  • To foster safety and sustainability, along with streamlining operations across various applications, and implementing established global practices in India.
  • To create a supportive infrastructure and an efficient incentive structure for economical adoption of sustainable technologies.
  • To empower skilled operators for safety, productivity and equipment longevity.

How does the Technology Vision Roadmap 2035 address safety, solutions, and sustainability in technological adaptation?

Dimitrov Krishnan: The CE Technology Vision Roadmap 2035 lays out clear guidelines for addressing three focus areas: Jobsite Safety, Jobsite Solutions, and Sustainability.

Safety: Actions to eliminate safety related incidents on jobsite, encompassing operator safety, equipment safety, and occupational safety.

Solutions: To improve output quality, jobsite productivity and efficiency by 2X through use of right equipment for right application, enabling technology for equipment utilization and performance optimization, optimal equipment combination for accuracy and cost-efficiency, enhanced equipment for autonomy and real-time remote monitoring, and advanced planning and execution through site supervision and information visualization.

Sustainability: To reduce GHG emissions by 45% from 2005 levels (in sync with Government of India’s commitment) through sustainable product design and manufacturing, alternate fuels, advanced materials and circularity, supply chain management, recycling and end-of-life considerations involving re-manufacturing & reuse, extended producer responsibility (EPR), buyback programs, EV battery end-of-life management and green credits.

Managing Director Volvo CE India
With a more comprehensive regulatory framework, India’s CE industry can streamline operations, foster safety and sustainability, implement global best practices, and incentivize adoption of sustainable technologies.

Dimitrov Krishnan - Immediate Past President ICEMA, Convener, ICEMA Technology & Sustainability Panel, and Managing Director Volvo CE India

How will emerging technologies like Robotics, Automation, AI, etc. change traditional construction and manufacturing methods, contribute to sustainability, help in monitoring project status and machine health, and ensure worker safety, while also meeting shortage of skilled labor?

Deepak Shetty: The Indian CE industry is committed to infusion of cutting-edge technology into every facet of the Construction Equipment sector. This involves harnessing the power of Artificial Intelligence (AI), Internet of Things (IoT), Machine Learning, and advanced Robotics to revolutionise equipment design, operation, and maintenance.

For instance, AI has come to the forefront in recent times, with real time data analytics across multiple applications such as verifying vendor inventory levels, determining that expenditure is actually happening as per planned allocation, cross-checking on the extent of sustainability or ethical sourcing of materials and components, especially from Tier 2 & 3 cities. AI can identify and match people with the required skill sets for specific jobs in record time.

Asset Cloning tool or the Asset Intelligence Network – a live collaboration tool between operators and agencies for helping in building machines, the people purchasing the parts, and the OEMs delivering the machines - embodies data in the form of producing a machine from scratch; this will change the face of machine building forever.

As outcomes get impacted by more and more variables, the relevance of digitalisation and AI increases exponentially. For instance, on the shop floor, the management needs to ensure maximisation of productivity through proven use cases. Here, AI and ML come into play by enabling deployment of the right technologies for the right functions.

ICEMA CEO & Managing Director, JCB India
It is the industry’s responsibility to create awareness of the long-term benefits and returns on the initial outlays on advanced technologies by conducting sales promotion programmes that highlight improvements in job safety, operator efficiency, productivity, equipment maintenance, and reduction in project cost.

Deepak Shetty

How can the industry shift the mindset of buyers towards valuing long-term benefits over the initial costs associated with high technology integration?

Deepak Shetty: Although customers are increasingly willing to pay for increased technology integration, there is still a long way to go in shifting mindsets towards considering costs versus benefits in the long-term, rather than in the immediate time frame. The major challenges that remain are those of Awareness, Acceptance and Accountability. It is the industry’s responsibility to create awareness of the long-term benefits and returns on the initial outlays on advanced technologies by:
  • Conducting sales promotion programmes, highlighting the benefits of embracing the high technology products, such as improved job safety and operator efficiency, enhanced productivity, reduced equipment maintenance and overall reduction of the project cost.
  • Creating awareness regarding the immediate need for switching over to CEVs powered by alternate fuels to embrace sustainability.

Building Domestic Capabilities & Capacities

What are your thoughts on the current state of manufacturing in India? How can India enhance its domestic production capabilities to reduce reliance on imported high-tech components?

V G Sakthikumar: The Indian CE industry is intrinsically aligned with the Government's Make in India initiative and is taking concrete steps to reduce import dependence and be self-reliant. This would not only enhance competitiveness but also improve resilience in the supply chain. The industry’s objective to become a global manufacturing and export hub for Construction Equipment also segues into the Make in India initiative, as embodied by the MHI mantra of ‘Local to Global’.

Despite achieving minimum 80% indigenisation level in case of more than 50% of CE products, the Indian CE industry is heavily dependent on import of high precision components. The industry’s high technology products and precision components, which will drive future trends, involve high technology aggregates and systems such as hydraulics, electronic controls, pumps, drives, engines, powertrain, undercarriage items etc., which are largely being imported at present. These require considerable investment by the Indian manufacturers in the value chain to enable their domestic production.

Managing Director, Schwing Stetter India Pvt. Ltd.
The CE industry’s endeavour to become a global sourcing hub is expected to generate sufficient demand to create within India the requisite scale for production of the high precision components that are currently being imported.

V G Sakthikumar - Treasurer, ICEMA Convener, ICEMA Manufacturing & Supply Chain Panel, and Chairman & Managing Director, Schwing Stetter India Pvt. Ltd.

Strategic Initiatives and Global Positioning

What strategic initiatives is ICEMA undertaking to make the Indian CE industry the second largest globally by 2030?

Deepak Garg: As the construction industry transitions to smart production solutions and sustainable processes, there is growing demand for more productive and energy efficient machines operating on alternate fuels such as electric batteries, CNG, biodiesel, etc. By advocating accelerated adoption of emerging technologies, including use of alternate fuels, India is positioning itself as a destination for developing such solutions.

ICEMA is in talks with globally reputed systems and component suppliers in Japan, South Korea, Italy, and other countries for establishing their facilities in India to manufacture and supply high technology components to the Indian OEMs.

Sany Heavy Industry India
By advocating accelerated adoption of emerging technologies, including use of alternate fuels, India is poised to become a destination for developing such solutions.

Deepak Garg, Convener - ICEMA Strategic Partnerships Panel, Vice Chairman & Managing Director, Sany Heavy Industry India

These initiatives will go hand in hand with the government’s endeavours to strengthen the MSME sector on one hand and attract FDIs and overseas manufacturers on the other.

The CE Industry Missions to relevant countries are also expected to help in attracting foreign CE component players to India and in building the necessary supply chain ecosystem that is critical to enhance our domestic value addition and in enabling the Indian CE industry become Atmanirbhar.

ICEMA concluded a CE Industry Mission to Japan on 24th May, 2024, to meet Japanese CE component manufacturers, and share with them the Indian CE industry’s growth outlook and the opportunities it offers. ICEMA, in co-operation with the Embassy of India in Tokyo, has invited Japanese component manufacturers to establish or expand their manufacturing operations in India and be a part of the Indian CE supply chain ecosystem.

ICEMA is also engaging with various state governments to set up industrial promotion policies for its members and for component partners to invest in manufacturing in India. These initiatives are expected to help India become a global manufacturing and export hub for construction equipment and achieve its goal of becoming the world’s second largest CE industry.

How important are collaborations with international companies for the future growth of the Indian CE industry? What steps is ICEMA taking to foster such partnerships?

V G Sakthikumar: Becoming a global CE manufacturing and component sourcing hub is key to the Indian CE industry’s aspiration of becoming the second largest in the world by the end of the decade. Since the domestic CE market is characterised by low volumes and high variety of products as well as cyclicity of demand, there is lack of sufficient incentive on the part of manufacturers to invest in production of high-value products and components. An infusion of export demand, however, has the potential to transform domestic manufacturing by inducing OEMs as well as overseas partners to invest in domestic manufacture of high value and high technology components and products.

Managing Director, Schwing Stetter India Pvt. Ltd.
Inducing OEMs and overseas partners to invest in domestic manufacturing of high value and high technology components and products can transform India's transform local manufacturing capabilities.

V G Sakthikumar

Therefore, international collaborations would play a key role in powering the Indian CE industry’s future growth. This process is embodied in the MHI mantra of ‘local to global’ – incentivising overseas partners to set up local manufacture of globally competitive products in India, and then going global, and finally emerging as an international export hub.

Besides reducing the cost of manufacturing, localisation is also about boosting competitiveness through enhanced technological capability of manufacturers, as well as consistency and reliability of processes. This results in assured quality of products, agility to meet market requirements, and reduce lead times. The resultant overall cost reduction reinforces the strength of the supply chain. In areas where this is already happening, building capability along with consistency of processes is resulting in products of global quality, which can be easily exported.

What forward-thinking strategies are being implemented to overcome current challenges and embrace new opportunities in the construction sector?

V. Vivekanand: CE machines equipped with automation and telematics are revolutionising the industry, paving the way for a future characterised by versatile, efficient, intelligent, and environment-friendly machines. On one hand, the modern machines are helping in achieving better performance with lower operating costs, on the other they are helping in bringing down the carbon footprint of the industry by reducing the emission levels, thereby furthering the agenda of sustainability. The industry has introduced more than twenty different models of alternative fuel-based machines in recent months, and looks forward to a supportive policy framework to incentivise and encourage the quicker adoption of such machines by the customers.

Sustainability Initiatives

What sustainability initiatives are being adopted to make construction projects financially viable for contractors? How are these initiatives reducing waste, CO2 emissions, and the total cost of ownership in construction projects?

Dimitrov Krishnan: To cater to the evolving demand trends in Construction Equipment, the industry needs to adopt measures to improve the sustainability and efficiency of machines as well as processes. There are high expectations from the Construction Equipment sector in enabling the Indian economy to become carbon neutral. In achieving this, a key role will be played by equipment operated on alternate fuels, use of alternate materials, and measures to promote circular economy.

Currently, OEMs are working on development of Construction Equipment powered by alternate fuels such as Hydrogen, CNG, Methanol, Biodiesel, and Hybrid technologies to reduce emissions. Electrically powered CEVs have also been developed on fast track by most of the OEMs. Recycled materials reduce demand for raw materials, transportation costs, and mining activities. Use of alternate materials can also make machines cheaper, lighter, and more energy efficient.

As the industry association for Construction Equipment, ICEMA is pursuing advocacy with the Government for implementing the Scrappage Policy for CEVs. The industry is engaged in developing equipment that complies with CEV Stage-V emission norms for reducing emissions. OEMs have developed fuel efficient CEVs along with high-tech features, leading to reduced Operating and Owning (O&O) cost of equipment.

Managing Director Volvo CE India
Recycled materials reduce demand for raw materials, transportation costs, and mining activities, while use of alternate materials can make machines cheaper, lighter, and more energy efficient.

Dimitrov Krishnan

Attracting Youth to the Construction Industry

What promising opportunities are there to meet the changing workforce needs in the manufacturing industry, given the technological advancements and new skill requirements?

Shalabh Chaturvedi: As the Construction Equipment industry imbibes advanced technologies and broadens its areas of application, it is throwing off its old image of a primitive, low-key industry and is emerging as a technology and skill-intensive industry with a high profile.

ICEMA, in collaboration with the National Skill Development Council (NSDC), promotes Infrastructure Equipment Skill Council (IESC) for building the skill ecosystem for the CE industry. Under the mandate of Ministry of Skill Development and Entrepreneurship (MSDE), IESC focuses on skilling, upskilling, and reskilling the workforce to meet industry needs. The Council represents more than 40 OEMs in the CE industry and has developed 40 job roles covering over 80% of the CE industry’s workforce. IESC has already developed over 28 Qualification Packs and certified over 70,000 operators, so far.

How is ICEMA collaborating with the government and educational institutions to make construction equipment operator roles more attractive to the youth?

Shalabh Chaturvedi: India’s continued focus on infrastructure development and increasing export potential has paved the way for the Indian CE industry to become the second largest market by 2030. Pivotal to the growth of the CE industry in India is the requirement of a highly skilled workforce, which can catapult the Indian CE story into its next phase of exponential growth. People priorities and strategies will be key enablers towards achieving such business objectives.

In this context, ICEMA has established a Human Capital Panel to address the supply-demand gap in human resources in the CE industry, especially considering the need for people to work with advanced technologies. This panel includes sub-panels focused on talent attraction through outreach to institutes, fostering maturity in Human Resource Management, and promoting increased diversity and inclusion in the workforce.

ICEMA Human Capital Panel
ICEMA has been instrumental in enhancing workforce capabilities through its collaboration with NSDC and IESC, introducing advanced training modules, leveraging technology, and forming strategic partnerships with industry leaders and academia.

Shalabh Chaturvedi - Convener, ICEMA Human Capital Panel, Managing Director – India & SAARC, CASE Construction Equipment India

Human skills are as important as AI for the CE industry. ICEMA is deepening its engagements with academic institutions by introducing a curriculum on the CE industry in engineering and management programs and by organising industry talks at these institutes.

In collaboration with IESC, the Association has been instrumental in enhancing workforce capabilities, crucial for achieving the national goals of Viksit Bharat 2047 and has further plans to introduce advanced training modules, leverage cutting-edge technology, and form strategic partnerships with the academia as well as industry leaders.
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