India's engineering machinery industry achieved 3% growth in fiscal 2025, with outstanding export performance

On May 28, 2025, the Indian Engineering Machinery Manufacturers Association (ICEMA) announced that the Indian engineering machinery industry achieved a year-on-year growth of 3% in fiscal year 2025 (April 2024 to March 2025), with a total equipment sales of 140,191 units (135,650 units in fiscal year 2024). Although the domestic market grew by only 2.7%, the overall performance of the industry has been improved due to the 10% growth in exports and further consolidated India's position as the third largest construction machinery market in the world.

Mr. V. Vivekanand, Chairman of ICEMA and General Manager of Caterpillar India, said: "The 3% growth rate in fiscal 2025 demonstrates the resilience of the Indian engineering machinery industry, especially in the severe domestic market environment. Although we face difficulties during the Indian election and domestic demand setbacks, the 10% growth in exports proves the global competitiveness of manufacturing equipment in India. This export momentum has laid a good foundation for our industry to cope with the expected growth in engineering machinery demand in the future."

Key Highlights of FY2025:

● Total sales: 3.3% year-on-year to 140,191 units (FY2024: 135,650 units)

● Domestic sales: 2.7% year-on-year to 126,961 units (FY2024: 123,660 units)

● Export performance: significantly increased by 10%, sales reached 13,230 units (FY2024: 11,990 units)

● Market leadership: Major equipment market segments achieved growth

● Production dominance: Among the domestically sold construction machinery, 98% are produced in India. By market segment performance: Earthwork engineering equipment continues to dominate the market, accounting for 71% of the market share, with sales of 99,159 units (growth 6%). Among them, the sales volume of excavator loaders was 53,133 units (accounting for 54% of the share), followed by crawler excavators, with sales volume of 35,816 units (accounting for 36% of the share).

Material handling equipment continues to maintain its position as the second largest market segment, with sales of 17,050 units; concrete equipment sales of 14,473 units, a year-on-year increase of 3%; road construction equipment sales of 7,002 units, and material processing equipment sales of 2,507 units.

Domestic market challenges:

In the fiscal year 2025, the industry faced a weak domestic market demand, with domestic net sales (excluding non-OEM exports) only increasing by 2%. The significant increase in non-OEM exports (19%) suggests that, despite seemingly stable total domestic sales, domestic demand fundamentals have shown signs of slowing.

Mr. Deepak Shett, President-elect of ICEMA and CEO and General Officer of JCB India, said: "For a variety of reasons, FY 2025 is a year of strategic repositioning for our industry.

Although the growth rate was lower than expected at the beginning of the year, as an industry, we still have confidence in the future. This year's national elections, rising input costs and emission standards have had a negative impact on the market's growth momentum. However, exports in fiscal 2025 increased by nearly 10%, which to some extent compensated for the impact of weak domestic demand.

At the national level, India has become the fourth largest economy in the world, and India will continue to focus on infrastructure construction. The industry remains resilient as always and looks forward to more growth drivers besides the road and highway sectors to jointly shape a stable and sustainable growth model. This is crucial to support India’s local manufacturing of these products, driving the industry’s continued investment and creating more jobs.

Mr. Jaideep Shekhar, convener of the ICEMA Industry Analysis and Insights and Group, and Terex India’s Vice President and General Manager of Asia Pacific and Middle East, Africa, Europe and Russia, said: “While the challenge of slowing domestic growth in fiscal 2025, the adaptability of the Indian engineering machinery industry is reflected in its strong export performance. Domestic production accounts for 98%, coupled with growing international demand, highlights the maturity and competitiveness of India's engineering machinery ecosystem. With the continued growth of the demand for engineering machinery in the future, collaboration between the industry and the government will be crucial to respond to market challenges and grasping growth opportunities. "

Ms Seema Gupta, Director General of the Indian Engineering Machinery Manufacturers Association (ICEMA), said, "Domestic growth in fiscal 2025 is almost stagnant, which is consistent with expectations, mainly affected by the Indian general election and the implementation of new emission standards. These two major events have caused fluctuations in demand throughout the year. Although the material handling and material processing segments have negative growth due to slowing end-user industry activity, the industry as a whole has shown strong resilience. ICEMA will continue to work closely with industry stakeholders and governments to sustain and drive future growth. ”

Growth drivers and market trends:

Although the domestic market is facing challenges, the industry's exports have performed well due to the international community's growing recognition of the quality of manufacturing in India, competitive pricing and expansion of global layout. However, domestic demand is restricted by factors such as extended rainy season, tight financing conditions, raw material supply and price issues, and delays in key areas such as highway construction and rural infrastructure. The industry has turned to the export market while maintaining its domestic production capacity, demonstrating its strategic adaptability in challenging environments.

Future Outlook and Industry Support:

Looking forward, the industry expects the demand for construction machinery to grow due to expected infrastructure investment and economic recovery. However, to seize this expected growth opportunity, the industry will need the necessary support from the government, including stimulating domestic demand through policy interventions, promoting financing channels and solving supply chain challenges. With a strong export base and solid domestic manufacturing capabilities, the industry is expected to meet future demand, provided that the appropriate support mechanism is implemented.

About ICEMA:

Industrial Engineering Machinery Manufacturers Association (ICEMA) is the highest industry organization representing India's leading engineering machinery manufacturers. Members of the association account for more than 95% of the total construction machinery manufactured and sold in India. Through policy advocacy, industry research and international cooperation, the association is committed to promoting the growth and development of the Indian engineering machinery industry.

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