The mining and construction equipment (MCE) industry in India is expected to see significant growth in the next 5-7 years, with localization levels projected to increase to 70-80 per cent, according to a report from ICRA. This shift could potentially save the industry nearly USD 3 billion in foreign exchange annually and enhance India’s cost competitiveness, making it more attractive for exports. The industry has already been growing at a compound annual growth rate (CAGR) of 12 per cent over the past decade, reaching 1.36 lakh unit sales in FY2024. ICRA estimates that the industry could become a USD 25 billion market by 2030.
To achieve this projected growth, a strong supply chain ecosystem will be crucial, according to ICRA. The MCE industry’s Vision 2030 aims to make India the world’s second-largest MCE market and a global hub for manufacturing and exports. Factors such as the government’s Production Linked Incentive (PLI) scheme, the China+1 strategy adopted by original equipment manufacturers (OEMs), and the Indian government’s efforts to improve the ease of doing business and build better infrastructure are expected to support the drive towards greater localization.
Currently, the MCE industry in India has high import dependence, with approximately 50 per cent of its components being imported from OEMs based in countries like China, Japan, South Korea, and Germany. The industry also relies on imports for key raw materials like specialty steel. Increased localization and domestic production could help reduce this import dependence and strengthen the competitiveness of the domestic manufacturing industry. The government’s initiatives and global trends towards diversifying supply chains present an opportunity for India to attract more investments and become a key player in the MCE market.
The potential growth of the MCE industry in India presents an opportunity for the country to save on foreign exchange and boost its export potential. With a focus on localization and developing a robust supply chain ecosystem, India can work towards achieving its Vision 2030 goals and becoming a global manufacturing and export hub for mining and construction equipment. The industry’s growth is supported by factors such as government incentives, global geopolitical dynamics, and efforts to improve the ease of doing business and infrastructure in the country.
In conclusion, the MCE industry in India is poised for significant growth in the coming years, with localization levels expected to increase and the market projected to reach USD 25 billion by 2030. The industry’s Vision 2030 aims to make India a key player in the global MCE market, supported by government initiatives and global trends towards diversifying supply chains. By focusing on localization, developing a strong supply chain ecosystem, and reducing import dependence, India can enhance its competitiveness and create opportunities for growth and investment in the mining and construction equipment sector.
