Testing & Interesting Times
After the most unusual year that we experienced in our lifetime, the calendar year unfolding is expected to be challenging but promising for the Indian construction equipment industry. The new year will be challenging because of the severe impact that the pandemic had on the market which has just started recovering. It is also promising because of the opportunities in the market for more infrastructure creation. NHAI is launching its first InvIT of Rs 50 billion which is likely to set the stage for making NHAI business model sustainable where it will be able to offload long-term earning assets and deploy liquidity for furthering highway projects. Metro projects are underway along with the bullet train project. Railways has a capex plan too. So, while these projects are in the fray, the project pipeline has been the weakest in 16 years. To move from a trot to a gallop, the project launches will need to be accelerated at a rapid pace. Thus, many feel that the upcoming year will be of challenges and consolidation. Despite the slowdown in 2020, the government’s policy initiatives on Atmanirbhar Bharat and mining reforms have favourable impact on the industry. These initiatives are expected to be positive on the equipment industry in the year 2021. However, the challenges will be on increasing cost of steel and other input costs which can be reflected on the equipment price.

Road construction and mining are doing well in the country despite the prevailing pandemic conditions. Both these are the demand drivers for earthmoving equipment. While highway projects are in full swing, rural road projects are also doing well in the country. Mining segment is picking up momentum after the policy revival. The government’s plan to introduce structural reforms in mining will bring in new vigour in mining industry. The proposed structural changes in the mining sector aim to increase participation of the private sector in mineral exploration, redefine the norms of exploration for auction of mineral blocks to ensure a seamless transition from exploration to production. This will boost the demand of earthmoving equipment further. The Cover Story explores the market scenario in earthmoving equipment, factors that impact the market revival in 2021 and the long-term market outlook.

The use of Aerial Work Platforms (AWP) is still in its infancy in India. While use of this equipment is mandatory in developed markets of US and Europe to access heights, in India there is no legislation for such mandatory use to work at heights. Also, there is extensive import of old used access equipment to the country which is preventing the growth of AWP market in India. However, in the new market condition, with many mega projects coming up in the country, users are gaining awareness about the advantages of AWPs and the demand is expected to improve in the coming years. The Feature explains more on AWP market in India and the market outlook. The CASH Special Focus on OTR Tyres explains the emerging trends in the market, new developments in products and technologies and the market opportunities. Also read other columns for a wider update on the industry.

Wishing all our readers a Happy, Safe and Prosperous New Year!