The current slowdown is giving a drubbing to the Indian construction equipment (CE) market with the equipment sales diving drastically in the past few months in contrast to what the industry had anticipated during the start of the year. Currently, the situation is alarming for the CE market as there is a slowdown visible in major construction segments such as roads and highways. The rating agency ICRA has revised its outlook on Indian CE market growth to negative, following the slower pace in awarding of road projects, delayed payments to contractors, land acquisition issues and an overall tight financing environment. All these issues have put the CE OEMs in a tight spot in terms of sales. Last year, the CE market registered a sales growth of about 30 per cent, while this year also the industry anticipated a similar growth due to a strong government at the Centre and many projects under implementation while many have already planned. Till August 2019 in the calendar year, industry volumes have contracted by 16 per cent in the key product categories of backhoe loaders, excavators and wheeled loaders, according to ICRA.

However, the government's quick corrective measures on various fronts is a big relief for the industry. The OEMs are optimistic about the government's steps to combat the situation. They feel that once the planned projects take off, the equipment sales will bounce back. The recent moves with respect to taxation where the profitable companies will save 10 per cent in taxation and the initiative to attract fresh manufacturing at a low taxation rate of 17 per cent are indicative of an out-of-the-box approach in play. We expect a series of such moves aimed at restoring the mood and sentiment to the industry.

What is the road ahead for road construction equipment market? Will the Ministry of Road Transport and Highways (MoRTH) let the pace of road execution slacken? According to industry sources, both the awarding and construction of road projects have slowed down last year and the trend is still continuing. With the corrective actions of the government, the situation can improve in the coming days. The current slowdown will be temporary and things are going to move ahead again with more construction activities in rural roads and highways. Maintenance of existing roads is also a major opportunity for road equipment. So, there is no room for a stalemate for the road equipment segment. The Cover Story elaborates more on the market realities of road equipment. Also, read other features and regular columns for an overview of the industry.

The INDIA CONSTRUCTION FESTIVAL on October 15-16 at ITC Maurya in New Delhi, in association with ENR magazine, will present four blockbuster events. Get the latest updates on www.IndiaConstructionFestival.com or call 022-2419 3000 and book your seat at this grand must-attend event:

• 9th India Roads Conference
• 17th Construction World/ENR Global Awards
• CW Leadership Sumit
• 7th Equipment India Awards

We wish all our readers a very Happy and Prosperous Diwali!