Growing the Construction Equipment Industry in India
“$ 16 Billion to $ 21 Billion” that is the size to which the construction equipment Industry in India is set to grow by 2020 given India’s infrastructure spend in the years to come. While the last decade saw healthy growth in the ECE industry, the past few years have proven to be difficult with the industry being in a slump due to the slow down in the economy. However industry insiders believe that the long term prospects for the industry are good with an uptrend of CAGR growth of 20-25% over the next few years to come.
India is in dire need of a strong infrastructure to boost the economy and overall development of the country. Here is a brief overview of the infrastructure projects that will support the growth of the construction equipment in India.
- Roads: The government has ambitious plans for developing the road network across the country. With stalled projects starting again, new tenders being awarded and having a couple of projects in the pipeline for construction of National highways, industrial corridors, state highways and rural roads will provide a huge boost to the ECE industry in India. 97000 crore is the budget allocated to the development of roads across the country in the 2016 Union Budget. Th increased spending will prove to be a steroid to the growth of the industry.
- Airports: 160 airports across the country are be revived at a cost of 50-100 crore each, in addition to 10 non functional air strips with the Airport Authority of India (AAI). The revival of these airports will not just boost the connectivity across the country but also help revive the ECE industry from the slump and increase liquidity and cashflow in the market.
- Smart Cities: 100smart cities are to be developed across the nation in addition to rejuvenation of 500 more cities. The budget allocated for construction of these cities is a total 0f 980 million INR. One can only imagine the boost that such spending on infrastructure will provide the ECE industry.
- Railway: 400 A and A1 category stations have been identified for redevelopment and 1.21 lakh crores is the budget allocated to developing the railway infrastructure across India in the 2016 union budget.
- Port development: US $ 10 billion is the budget allocated to development of new and existing ports across India. The existing ports are likely to be revamped and new one are set to have state of the art facilities in addition to transport corridors.
- Solar Power projects: 21 new solar parks are to be commissioned in addition to the infrastructure that is to be built around the solar parks. and the transmission. Additionally transmission infrastructure also needs to be created for distribution of the electricity generated.
These are only some of the major projects that will jump start the growth of the ECE industry and keep it on a growing trajectory in the years to come. These projects will not only grow the industry in terms of size but also mandate growth terms of the quality and technology of the ECE being manufactured.