India’s domestic sales of construction equipment fell by 6.7 percent year-on-year to 113,229 units in the fiscal year 2025-26, according to data released by the Indian Construction Equipment Manufacturers Association (ICEMA). The decline has been attributed to a combination of factors including slower progress on infrastructure projects, increased equipment costs following the adoption of more stringent emission standards, financing difficulties, and rising commodity prices exacerbated by the ongoing conflict in West Asia.

While domestic demand softened, exports of construction equipment from India surged by 31.5 percent year-on-year, reaching 17,394 units in the same period. ICEMA noted that this growth was largely driven by the country’s shift to new emissions standards that better align with regulations in developed markets. Consequently, Indian manufacturers have gained broader access to international markets, particularly in Europe and other regions.

Industry leaders highlighted that the geopolitical tensions in West Asia and disruptions around the Strait of Hormuz pose risks to the construction equipment sector. Increased crude-linked input costs, especially for diesel and bitumen—essential materials for road construction—may challenge both domestic production and export activities in the near term. Deepak Shetty, ICEMA president, underscored these concerns during a recent press briefing in New Delhi, pointing out the potential difficulties in exporting to key markets such as the United Arab Emirates.

The combined impact of supply-side pressures, rising costs, and geopolitical fragility reflects a complex environment for India’s construction equipment industry as it navigates both domestic and international challenges in FY26.