Infra Push, Sops for Exporters to Boost Construction Equipment Sector: JCB India CEO

The government needs to continue with its focus on infrastructure development and come up with some encouraging scheme for exporters to push growth of domestic construction equipment industry which is expected to surpass China to become the second largest market globally by 2030, JCB India CEO and MD Deepak Shetty said on Wednesday.

The Indian construction equipment market in volume terms stands at around 95,000-1 lakh units per annum, while China and the US have annual volumes of around 1.75 lakh units and 2.5 lakh units, respectively.

In a press conference here, Shetty stated that the industry has faced certain challenges this year leading to a drop in volumes as compared with last year while hoping that resolution of tariff issues with the US and robust monsoons would help the sector grow next year.

"So the first and foremost request is that focus on infrastructure should continue. The second request is that, how do we fund the state governments so that they can invest more and more into rural infrastructure development," Shetty said.

It is also expected that the government's focus on infrastructure development in rural areas will continue, he said.

"We have seen some challenges on the export side. So we feel that the government should announce some motivating scheme for exporters so that we can take care because whatever struggle we have gone through because of the tariff, we can sort of counter that in a particular sense," Shetty said.

He noted that certain state governments were struggling to fund the contractors.

"Besides, time has come for us to really push exports from the country. The global markets are becoming more and more open thanks to the FTAs, and we should really leverage those FTAs and move forward," Shetty said.

JCB exports to over 135 countries from its Indian plants.

He noted that the Indian construction equipment market is going to witness rapid growth over the next five years.

"Our penetration still is on the lower side, and we expect that in the next five years, we should become the second largest construction equipment market. There is one sector in India where the use of machines is on the lower side, that is agriculture," Shetty said.

The construction equipment segment volume is expected to decline to around 90,000 units this year from 1 lakh units in 2024, hit by stalling of shipments to the US due to the tariff situation.

Commenting on JCB India, Shetty said the company expects a double-digit growth in both domestic sales and exports next year having seen its overall volumes contract from around 64,500 units last year to around 57,000 units this year.

The company exported around 14,000 machines last year, which included 10,000 units to the US. This year the company expects to export around 11,500 units in spite of the tariff situation.

In the domestic market, the company sold around 50,000 units last year and this year it is expected to drop to 47,000 units this year.

"We easily see a double digit growth in exports next year. There should be some calming effect, obviously, if the tariff condition is sorted out (with US)," Shetty said.

The company expects a double-digit growth in the domestic market as well with robust monsoons going to contribute well to the rural economy.

"Around 70% of our machines are sold in rural India and so it is certainly going to be very positive. Also, certain states like Andhra Pradesh and Maharashtra are focussing a lot on the infrastructure projects," Shetty said.

He noted that the company is focussing to develop products compatible with hydrogen and some specific machines for Railways and defence sectors.

The company is gearing to unveil a 52-tonne excavator, the largest ever designed in India, he added.