India’s earthmoving equipment market has been on an impressive growth trajectory in recent years, driven by the country’s rapid urbanisation, infrastructure development, and increased investment in mining and construction sectors. As of 2024, several key trends are shaping the market dynamics, reflecting broader global influences and unique local factors. 

According to the latest report from ICEMA, the Indian construction equipment market has experienced a significant surge in sales, marking a 26 per cent increase to 1,35,650 units in the fiscal year 2023-24. This performance as a substantial leap from the previous year's sales of 1,07,779 units. The industry’s robust performance is reflective of heightened demand across both domestic and international markets, with sales up by 24 per cent and 49 per cent, respectively. This uptick in demand has been particularly notable in the earthmoving equipment segment, which saw a 21 per cent increase in sales to 93,531 units, making up approximately 70 per cent of the total CE sales for FY24. Backhoe loaders and crawler excavators, major components of the earthmoving segment, witnessed remarkable growth rates of 55 per cent and 35 per cent, respectively. These two categories combined accounted for 90 per cent of the earthmoving equipment's total sales.

The Indian government’s ambitious infrastructure projects, including highways, smart cities, and urban transit systems, have significantly boosted demand for earthmoving equipment. Initiatives like the Bharatmala Pariyojana and the Smart Cities Mission are driving construction activity across the country. The emphasis on building and upgrading road networks, bridges, and public transport systems has led to a surge in demand for excavators, bulldozers, loaders, and other earthmoving machinery.

The recent push for infrastructure development is not just about quantity but also quality. There is a growing need for advanced equipment that can handle complex tasks efficiently. This trend is contributing to a shift from basic machinery to more sophisticated models equipped with modern technologies and enhanced features.

The backhoe loader is always the first choice of customers in India due to its versatility in applications with quick inter and intra-site machine movement. The statement ‘sales of backhoe loaders have been under retrogression’ is not quite accurate, as during the last five years, backhoe loaders’ market contribution has been in the range of 52 to 55 per cent. Over the past three years, JCB has introduced fuel-efficient and low-periodic maintenance products, leading to a significant improvement in the total cost of ownership (TCO). JCB offers the largest range to serve different customer segments and applications.

“We have launched the JCB Eco XPERT range with CEV Stage IV introduction to enhance profitability for customers. We have observed that rental charges have been improving across India during the past few years to accommodate inflation. As a short-term strategy, we continuously focus on every opportunity to reduce costs through a unique initiative called LASER, ensuring minimal price increases for customers. Through various field-level activities, we ensure that salient features are well understood by customers,” said Deepak Shetty, CEO & Managing Director, JCB India.

Dimitrov Krishnan, Managing Director, Volvo Construction Equipment India, said, “From my perspective, the volume growth in our market is driven both by domestic demand and export growth and it’s clear that the Indian CE market size is close to hitting the $10 billion USD mark.”

The skid steer loader is crafted to cater to multiple tasks simultaneously, eliminating the need for separate machinery purchases. This versatility significantly drives its demand. Moreover, the increase in infrastructural development nationwide further fuels its popularity. By utilising a skid steer loader, large-scale projects can be executed within deadlines without the need for excessive machinery expenditures.

In the Indian market, skid-steer loaders have garnered significant demand compared to other types of construction equipment, owing to their versatility and adaptability. Said Shalabh Chaturvedi, Managing Director, CASE Construction Equipment – India & SAARC region, “Skid-steer loaders offer a range of functionalities crucial for construction activities, including digging, lifting, and material handling, making them highly sought after for various tasks on construction sites. The adaptability of skid-steer loaders to diverse building sites is a key factor driving their demand. Their ability to navigate and operate effectively in confined spaces or areas where manoeuvrability is essentially makes them indispensable in many construction projects across India.”

In India, the skid steer loader market reported a gain of 11.94 per cent in value shipments in 2022 compared to 2021, along with a 23.54 per cent increase in CAGR in 2022 over the period of 2017. This indicates a sustained upward trend in the adoption of skid-steer loaders within the construction industry.

Said Sunil Newatia, Chairman and Managing Director, Suretech Infrastructure, “The growth rate of skids is too low when compared to the rest of the world. In a country like India, there is a market of approximately 500 skids in a year against 35,000 to 40,000 backhoe loaders. Skids are the highest selling construction equipment overseas while in India it is backhoes. Skids must be accepted as the most versatile and most important piece of equipment on a job site. Till that happens growth shall continue to remain sluggish.”

Similarly, another important segment is the excavator segment. Said Joydeep Baksi, National Sales Head – Sales & Marketing, Hyundai Construction Equipment India, “The hydraulic excavator market in India, particularly in the crawler excavator segment, has demonstrated impressive resilience and growth. Despite a significant decline in 2020 due to the COVID-19 pandemic, the market has rebounded and is now experiencing robust growth.”

According to the April 2024 OHR Report, the demand for crawler excavators will reach approximately 41,600 units by 2028. This projection reflects an impressive average annual growth rate of around 10 per cent, highlighting the sector's dynamism and potential.

Said Rohit Punjabi, Vice President (Excavator Business), LiuGong India, “With the equipment sales in India crossing all previous records, we too were a part of the rising curve in sales. All our equipment crossed all previous benchmarks; especially in excavators we witnessed a growth of more than 100 per cent over previous years. In wheel loaders, which is our forte the growth has been more that the industry growth. Our motor graders also witnessed a growth which was more than the industry growth.”

Technological innovation is a significant trend in the earthmoving equipment market. The introduction of advanced technologies such as telematics, automation, and artificial intelligence (AI) is transforming the industry.

Modern earthmoving machines are increasingly equipped with telematics systems that allow real-time monitoring and diagnostics. These systems provide data on equipment performance, fuel consumption, maintenance needs, and operational efficiency. This connectivity not only helps in predictive maintenance but also aids in optimising fleet management and reducing operational costs.

The rise of automation in earthmoving equipment is another notable trend. Automated systems can perform tasks with high precision and reduce the need for manual intervention. For example, autonomous dozers and excavators are becoming more common on construction sites, improving productivity and safety.

Said Punjabi, “Technological advancements have been transformative in the market, with automation, telematics, and IoT (Internet of Things) technologies making their way into construction machinery. These technologies enhance operational efficiency, provide predictive maintenance, and improve safety on construction sites. GPS-enabled machines and remote-controlled equipment have streamlined construction processes, reduced operational costs and improved overall project outcomes.”

With the growing emphasis on environmental sustainability, there is a push towards developing eco-friendly earthmoving equipment. Electric and hybrid models are being introduced to reduce emissions and fuel consumption. Although still in the nascent stage in India, these green technologies are expected to gain traction as regulatory standards become more stringent and environmental awareness increases.

Says BKR Prasad – General Manager, Marketing, Tata Hitachi Construction Equipment, “Over the next five years, the market of backhoe loaders will be increasing considering the number of first-time buyers. Also, keeping in mind the versatility of the machine, the market for backhoe loaders is expected to undergo several notable changes, particularly in response to environmental concerns and the need for greater energy efficiency.”

He added, “There could be a rise in the adoption of alternative fuels such as biofuels, hydrogen, or compressed natural gas (CNG) in backhoe loaders. Tata Hitachi introduced a CNG powered backhoe loader in Excon 2021. These fuels offer reduced emissions and can help address environmental concerns while enhancing energy efficiency. Although there is other evolving methods and technologies but the industry is in its early stages. In coming year, manufacturers will focus on improving the energy efficiency of backhoe loaders through advancements in engine technology, hydraulic systems, and overall machine design. This will not only reduce fuel consumption but also increase productivity and lower operating costs for users.”

“Overall, the market for backhoe loaders is likely to evolve towards more environmentally friendly and energy-efficient solutions over the next five years, driven by regulatory requirements, technological advancements, and growing awareness of sustainability issues,” said Prasad.

Said Amit Bansal, Director Sales & Marketing, Building Constructions Products (BCP) Division, Caterpillar India, “Caterpillar is contributing to a reduced-carbon future by investing in new products, technologies, and solutions to help our customers meet their climate-related objectives. We have committed that 100 per cent of our new products through 2030 will be more sustainable than the previous generation. We focus on embedding sustainability into the design, manufacture, and delivery of everything we do. We consider sustainability in our technology development strategies and new product introduction (NPI) process. Through R&D efforts, we develop new and more sustainable products and services for customers.”

He added, “Many Caterpillar products operate on lower-carbon intensity fuels, including biodiesel, renewable diesel, and biogas. These fuels reduce lifecycle GHG emissions in the fuel value chain; GHG emissions at the tailpipe are essentially the same as traditional fuels.

The new Cat® 424 Backhoe Loader retains the rugged reliability of the Cat 424B2 and gives customers more performance, fuel efficiency, options and comfort while lowering owning and operating costs. Its new India CEV Stage V engine meets current and future emissions standards for increased longevity in the market, while providing significantly more fuel efficiency than its predecessor and competitive models adhering to CEV Stage IV standards.”

Caterpillar’s technology strategy is determined by its assessment of how and where its machines will be working over the long term. “Based on this assessment, we focus on solving customer problems by making the machines smarter.  Cat products are ahead of time and aimed at increasing productivity for its customers. Caterpillar is cognizant that market viability of some product means applying appropriate technology and standards for products that meets local Indian standards and market requirements. Where technology adds benefits such as fuel efficiency, emissions reductions, lower owning and operating costs or improved safety, it adds value that customers appreciate. For India, and for the rest of the world, the market adopts new technology in line with regulatory requirements and as it recognizes return on investment,” added Bansal.

JCB products consistently stand at the forefront of technological advancements, offering unparalleled value to its customers. “Within our ecoXpert range, our latest backhoe loader models are equipped with the highly fuel-efficient JCB 444 engine, providing approximately 10 per cent enhanced fuel efficiency and boasting a remarkable 15 per cent reduction in maintenance costs. Through our state-of-the-art in-house design centre, we have crafted the JCB range with best-in-class engine technology, eliminating the need for any after-treatment while ensuring highly efficient hydraulics,” said Shetty.

He added, “As part of our long-term strategy, JCB has set a vision and roadmap to reduce carbon footprint by improving fuel efficiency. We are committed to ensuring lower operating costs for JCB backhoe loaders, ensuring continued operations and maximum return on investment for our customers. We are celebrating the achievement of 4.0 lakh+ JCB customers, which has made JCB synonymous with trust.”

Said Surat Mehta, Head of SDLG Business in India, “As a global organisation, we are committed to sustainable practices. By 2030, our goal is for 35 per cent of the equipment sold in India to incorporate sustainable technologies. This commitment extends beyond battery electric technology to encompass innovations in grid electric machines and hydrogen fuel cell products. We envision significant advancements in sustainable technology over the next five to six years, underscoring our dedication to creating a better world.”

He added, “We pioneered the introduction of battery electric wheel loaders in India, which has significantly impacted the market. The battery-operated electric wheel loader was launched during Bauma Conexpo 2023 in India. This innovation not only enhances operational efficiency but also reduces carbon footprints, aligning with our commitment to sustainability. To facilitate the adoption of this new technology, we offer equipment-as-a-service, allowing customers to pay based on usage. Currently, around twenty SDLG loaders operate under this arrangement.”

Said Newatia, “IoT is primarily being used for fleet management, popularly known as Telematics in India. They provide you information on running hours, fuel consumption, productivity, operator efficiency, etc. depending on the modules/service provider selected by the customer. Data has become a very important part of all operations and provide critical information, which can help you reduce operation costs, prevent breakdowns and measure productivity.”

The rental market for earthmoving equipment in India is expanding rapidly. Companies are increasingly opting to rent rather than purchase machinery due to the high capital expenditure involved in buying new equipment. Renting provides flexibility, reduces maintenance costs, and allows companies to access the latest technologies without a significant financial commitment.

Said Punjabi, “The Indian construction equipment rental market is witnessing significant growth, driven by massive infrastructure development, urbanisation, and various government initiatives; the market is projected to grow at a CAGR of 10 to 15 per cent over the next five years. Key drivers include government projects such as the Smart Cities Mission, Bharat Mala Pariyojana, and industrial corridor developments, various elevated projects which are increasing the demand for construction equipment.”

Rental services are also beneficial for managing short-term projects and mitigating the risks associated with owning and maintaining a large fleet of machinery. The rental market is becoming more organised, with several national and regional players offering a wide range of equipment for various construction and mining applications.

The Indian government’s “Make in India” initiative has spurred the growth of domestic manufacturing in the earthmoving equipment sector. Several international manufacturers are setting up production facilities in India, aiming to reduce import dependency and cater to local market needs more effectively.

Domestic manufacturers are also stepping up, providing competitively priced equipment that meets local conditions and requirements. This trend is expected to strengthen India’s position as a significant player in the global earthmoving equipment market, with increased emphasis on quality and innovation in local production.

Said Dimitrov, “Our commitment to the “Make in India” initiative is through our localised production and continuous improvement efforts. While we maintain global standards in product design and quality, we’ve adapted our offerings to suit the Indian market’s specific requirements. This approach has not only strengthened our market presence but also contributed to the nation’s economic growth.”

He added, “All our products that we offer comes with standard warranty or can be ordered with extended warranty with good maintenance contract. We can also offer additional options like compaction meter, where the customer can digitally monitor the level of compaction. This technology is not being fully adopted by the market but it is available.”

Said Mehta, “While we currently operate at a capacity of around 500 units annually, we plan to ramp up production to 1,000 units per shift, with the potential for further expansion. Our focus extends beyond wheel loaders to include other products like excavators. We ultimately aim to achieve a factory utilisation rate of 70 to 80 per cent, reflecting our commitment to localised manufacturing and product innovation.”

The future of the earthmoving equipment market in India looks promising, with continued growth expected in infrastructure development, mining, and construction sectors. Technological advancements, increased domestic manufacturing, and evolving regulatory standards will shape the market’s trajectory.

The shift towards more sustainable and efficient equipment, coupled with the expansion of rental services and the emphasis on skill development, will drive the market forward. As India continues to invest in its infrastructure and industrial sectors, the demand for advanced earthmoving equipment is likely to remain robust.

The Indian earthmoving equipment market is experiencing dynamic changes, influenced by a combination of technological innovation, regulatory developments, and evolving market demands. Companies that adapt to these trends and address the associated challenges will be well-positioned to thrive in this growing and competitive market.

The earthmoving equipment market in India faces several challenges, including high initial costs, maintenance issues, and the need for skilled operators. However, these challenges also present opportunities for innovation and growth.