At the start of last year, the expectation was that the Indian construction equipment market would decline.

The main factor was the general election, which is a surprisingly disruptive event for the Indian industry. Once an election is announced, no public works contracts can be awarded in case they are used to sway voter sentiment. The election itself is a marathon 鈥� in 2024 voting took place in seven regional phases from mid-April to the start of June. After that, the government has to be formed, and then the monsoon arrives.

All this usually wipes out several months of sales for the equipment industry, and sales for the calendar year tend to fall as a result.

But 2024 was different, with provisional figures showing the industry grew around 3 per cent to 108,000 units, according to Off-Highway Research. This makes India the third largest construction equipment market in the world after the USA and China.

What was different?

First, the election didn鈥檛 prove as disruptive as usual, with only a short hiatus in sales in the second quarter. Second, and more significantly, the start of 2025 has seen the introduction of the part of the Bharat Stage V emissions legislation for 37-kW/50-hp machines and below. This is similar to Europe鈥檚 Stage V laws in that it sets limits for both particulate matter (PM) and particulate number (PN).

Bharat Stage V requirements were already in place for equipment above 50 hp, and this had led to the launch by some OEMs of sub-50-hp variants of high-volume machines such as backhoe loaders. However, the new phase of the regulations is all-encompassing as far as construction equipment that can be driven on public roads is concerned, so applies to all sizes of backhoe loaders, ride-on compactors, wheeled cranes, etc.

The fact that this legislation was coming down the tracks last year drove a significant amount of pre-buying by customers who wanted to avoid the extra cost of the aftertreatment systems that would be required on machines to meet the Bharat V requirements.

2025 outlook

As a result, a lull is expected in construction equipment sales for the first half of 2025, and normal patterns of commerce will probably not be re-established until after the monsoon in September.

Chris Sleight, managing director, Off-Highway Research.

This will lead to a decline in construction equipment sales in India overall this year. Although the underlying market conditions remain favorable, any improvements in the final three to four months of the year are unlikely to be enough to offset the disruption at the start of 2025.

But this year鈥檚 dip in construction equipment sales is not expected to be much more than a bump in the road for India鈥檚 otherwise buoyant construction equipment industry. The market has seen average growth of around 8% per year over the last 20 years, albeit with some ups and downs along the way.

The need for infrastructure, and the investment which continues to flow in response to this, means Off-Highway Research believes the market will continue to grow for years, if not decades, to come.