
The CE industry experienced a number of challenges which adversely impacted the growth of the sector during the last fiscal. Dimitrov Krishnan, President ICEMA and MD Volvo CE India Pvt Ltd said, “A host of factors pulled the Indian CE industry sales down during the financial year 2021-22. The 8% volume de-growth registered during the period under review is largely owing to the second and third waves of the COVID-19 pandemic, which adversely impacted the pace of construction activity in the country on one hand, on the other, continued to bring supply chain disruptions, thereby constraining the industry’s ability to cater to the emerging demand.”

There was a significant slowdown in the speed of construction of roads & highways in FY22 to 28.64 km/day compared to a much higher pace of 36.5 km/day at which roads were constructed in FY21. This was a major factor for CE industry de-growth as 40% of the total demand for construction equipment originates from the road sector in India. Unprecedented natural calamities like cyclones and heavy rains also affected construction activity, particularly in the Southern part of the country, further affecting the demand for construction equipment. The sharp increase in input costs due to rising steel and other commodity prices created margin pressures for the CE manufacturers. The industry’s concerns have further accentuated on account of the recent ongoing Russia-Ukraine conflict.
V G Sakthikumar, (Convener, Industry Analysis & Insights Panel, ICEMA) said, “Though the year-on-year growth of the industry remained subdued, it is heartening to note that there has been a steady increase in the sales numbers during the four quarters of the current fiscal. Results in the fourth quarter, in particular, have been much better, with the sales volume having increased by 12% from the previous quarter. This has brought back much-needed growth momentum which when seen together with the recent Government announcements on infrastructure investments puts forward a strong pipeline and growth avenues for the Indian CE industry.”
While the Indian CE industry saw a tumultuous FY22, looking ahead, the industry is hopeful of a strong recovery during FY23 on the back of enhanced export potential and the Government’s continued thrust on infrastructure development through the announcement of mega plans including the National Infrastructure Pipeline, Gati Shakti Masterplan, National Monetisation Plan, the constitution of National Bank for Financing Infrastructure and Development (NaBFID) which is expected to be operational by the first quarter of the current fiscal and will be scaled up further through the year. Several infrastructure projects that have made substantial progress but are facing delays due to financing issues are likely to be given funding priority by the Bank, which in turn would help in the revival of these projects, boost construction activity and create growth opportunities for the CE industry. The sharp increase in budget outlay on capital expenditure for FY23 by more than 35%, from INR 5.54 lakh crore to INR 7.50 lakh has also given the industry confidence in a quick turnaround and delivering a strong growth during the current fiscal.
The industry expects a significant increase in the award of contracts for highway construction, new railway lines, water management, development of ports and others in the current year, while demand for mining equipment has been quite robust in the last 2-3 years is expected to continue its strong trajectory, aided by favourable global demand for commodities. The industry leaders feel that the overall future prospects of the industry are positive, as India is entering an exciting era of infrastructure-led growth, supported by the Government’s vision of an ‘Atmanirbhar Bharat’ and strong exports push on the back of ‘Make in India for the World’. The journey will further become exciting with the introduction of newer technologies in the industry such as the influx of digital, IoT and alternate fuels which will help the industry attain sustainable growth in the future.
ICEMA President added, “The phenomenal exports growth witnessed by the Indian CE Industry in the last 12 months augurs well for its future sustained growth. With new CEV-IV emission standards now completely adopted by the industry, there are significant opportunities for Indian CE manufacturers to tap into developed markets.”
“The key recommendations outlined in ICEMA’s Vision Plan 2030 report have helped drive the CE Industry’s interaction with policymakers over the last 2 years. In the context of a changing global landscape, ICEMA is now working on a revised Vision Plan 2030 to include modified projections and changing trends facing the industry. This revised plan will not only guide our interactions with the policymakers but also will give direction to the industry action for gearing up to face the challenges and harness the opportunities,” informed Krishnan.