Why this is important to Wisconsin businesses: Opportunities for Wisconsin exporters of construction equipment
India’s construction sector is one of the fastest-growing in the world. The sector contributes nearly 7 percent to India's GDP, and is expected to emerge as the third-largest in the world by 2025, which creates a huge demand for construction equipment in the coming years. The construction equipment industry’s revenue is valued at $6.5 billion, and is expected to reach $15 billion by 2020.
The industry employs more than 35 million people, making it the second-largest employer in the country. Any development in the construction sector influences a number of associated industries, such as cement, steel and technology.
The earth moving segment accounts for the largest revenue share of India's construction equipment market at 56 percent, followed by concrete equipment at 19 percent, materials handling at 13 percent, road construction equipment at 9 percent and materials processing at 3 percent.
The Indian government's initiatives such as “Make in India,” the Smart Cities project and Housing for All would boost the demand for construction equipment in the coming years. In addition, growing industrialization and the construction and expansion of roads, flyovers, metros, airports, ports, railways, highways and other infrastructure across the country is expected to boost the market for construction equipment in India.
India's construction equipment market is largely import-driven, especially in the higher load capacity segment. Chinese equipment manufacturers have a strong presence in segments like wheel loaders, bulldozers etc. The Indian market is price-sensitive, and Chinese construction equipment tends to be price-competitive, therefore placing downward pressure on the price of domestic and international equipment companies in India. However, there is a huge demand of high-end construction equipment from the U.S.
India’s Minister of Road Transport and Highways has increased the target for construction of national highways by 2.5 times for FY 2016-17. The new target is for construction of 25,000 km of national highways, compared to 10,000 km in the previous year.
The equipment rental and leasing market in India is at a nascent stage, and is small relative to developed markets like China, Japan the U.S., but has strong growth potential. Several Indian companies are entering into partnerships for equipment rental and leasing businesses, which is expected to drive the sales of equipment in India.
India presents urbanization opportunities, adopting technologies and developing smart infrastructure (roads, airports, residential, etc.), creating opportunities for Wisconsin companies to export construction machinery and equipment.