India Machinery Market Outlook to 2028

India Machinery Market Overview

The India Machinery Market was valued at USD 15 billion. This market growth is driven to the rise in industrial automation, the expansion of manufacturing sectors, and government investments in infrastructure development.

Major players in the market are Bharat Heavy Electricals Ltd (BHEL), Larsen & Toubro (L&T), Tata Hitachi Construction Machinery, JCB India, and Ashok Leyland. These companies have established a significant presence in the industry by offering innovative and robust machinery solutions to cater to diverse industrial needs, including construction, agriculture, and manufacturing.

In February 2023, the consortium of Bharat Heavy Electricals Ltd (BHEL) and Titagarh Wagons emerged as the only fully Indian bidder for the 72,000 crore Vande Bharat contract. This contract involves supplying 200 train sets, including manufacturing and 35 years of maintenance. Titagarh Wagons is also planning a 700 crore expansion to boost production capacity in the next 4-5 years.

The western region of India dominated the market in 2023. Maharashtra's strong manufacturing base, coupled with Gujarat's industrial hubs, positions these states as key machinery demand centers. The region's proximity to ports and well-established industrial infrastructure enhances its dominance in the market.

India Machinery Market Segmentation

The market is segmented into various factors like product, application, and region.

By Product: The market is segmented by product into agricultural machinery, construction machinery, and industrial machinery. Industrial machinery had the largest market share due to the rapid expansion of manufacturing industries, where industrial machinery like CNC machines, automation equipment, and material handling systems are in high demand.

By Application: The market is segmented by application into agriculture, construction, and manufacturing. The manufacturing sector held a dominant share by the government's push for domestic production and the PLI scheme. The sector's rapid adoption of automation and robotics further contributes to its dominant position.

By Region: The market is segmented by region into North, South, East, and West. The western region dominated the market share due to Maharashtra and Gujarat's industrialization and extensive infrastructure projects, supported by both state and central government policies.

India Machinery Market Competitive Landscape

Company

Established Year

Headquarters

Bharat Heavy Electricals Ltd (BHEL)

1964

New Delhi

Larsen & Toubro (L&T)

1938

Mumbai

Tata Hitachi Construction Machinery

1998

Dharwad

JCB India

1979

Haryana

Ashok Leyland

1948

Chennai

Tata Hitachi Construction Machinery: Tata Hitachi plans to invest 200 crore in FY25 to enhance localization efforts, aiming for a 70% localization rate within 2-3 years. This investment will support production at its plants in Kharagpur and Dharwad, where it currently holds a 24% market share in excavators, with revenues reaching 5,000 crore in FY24.

Ashok Leyland: Ashok Leyland has delivered its first 14-ton Boss Electric Truck to Billion E-Mobility at the Bharat Mobility Global Expo 2024 in New Delhi. This marks a milestone in the company's commitment to green mobility, as it aims to sell 500 electric and LNG trucks by the end of 2024.

India Machinery Market Analysis

Market Growth Drivers

Infrastructure Development Push: The Indian governments investments in infrastructure, including roads, railways, and urban development, are key growth drivers for the machinery market. In the Union Budget 2023, the government allocated INR 10 lakh crore for infrastructure, directly increasing demand for construction and industrial machinery. This unprecedented capital expenditure is projected to fuel machinery requirements across industries, with machinery suppliers seeing a sharp increase in orders.

Rise in Industrial Automation: With Indian manufacturing increasingly adopting automation to boost productivity, the demand for advanced machinery has surged. In 2023, the Indian manufacturing sector invested over INR 20,000 crore in automating key processes. This trend is particularly evident in sectors such as automotive, pharmaceuticals, and textiles, where automated machinery is essential to meet stringent production timelines.

Growing Renewable Energy Sector: The Indian governments commitment to renewable energy is driving demand for machinery in the energy sector. With plans to generate 500 GW of renewable energy by 2030, large-scale investments in wind turbines, solar panels, and associated machinery are on the rise. In 2023, INR 35,000 crore was invested in renewable energy projects, requiring advanced equipment for installation, monitoring, and maintenance.

Market Challenges

High Initial Investment Costs The machinery industry in India is capital intensive, and many Small and Medium Enterprises (SMEs) face challenges in adopting advanced machinery due to the high initial investment required. In 2023, it was estimated that over 60% of SMEs lacked the financial capacity to invest in automated machinery systems. This constraint hinders the adoption of modern equipment, particularly in sectors like textiles and food processing, where margins are often slim.

Skilled Labor Shortage One of the primary challenges faced by the machinery market is the shortage of skilled labor to operate advanced machinery. In 2023, it was reported that nearly 70% of Indian manufacturing units lacked a technically skilled workforce to handle automation and advanced equipment. This gap has resulted in reduced productivity and underutilization of high-end machinery.

Government Initiatives

National Infrastructure Pipeline (NIP): The National Infrastructure Pipeline (NIP) in India, launched with an investment of 111 lakh crore, aims to enhance infrastructure across sectors by 2025. It encompasses 8,964 projects, expected to boost economic growth and create jobs, while improving living standards and access to essential services for all citizens.

Make in India Initiative: The Make in India initiative has significantly advanced the machinery industry, facilitating machinery exports worth INR 30,000 crore in 2023. It has attracted over INR 10,000 crore in foreign direct investment, particularly in the automotive and aerospace sectors, enhancing India's manufacturing capabilities and reducing import dependence.

India Machinery Market Future Outlook

The future trends include increased adoption of AI-powered and electric machinery, growing demand for renewable energy machinery, and integration of 3D printing technology in manufacturing processes.

Future Market Trends

Increased Adoption of AI-Powered Machinery: By 2028, the Indian machinery market is expected to witness widespread adoption of AI-powered machinery, particularly in manufacturing and agriculture. AI-driven equipment will streamline production processes and enhance efficiency. The governments support for smart manufacturing technologies through financial incentives is projected to facilitate the installation of AI-enabled machinery across 30,000 industrial units by 2025.

Growth of Electric Machinery in Construction: With the Indian government pushing for green infrastructure, the demand for electric-powered construction machinery is expected to rise significantly. By 2027, over 10,000 units of electric excavators, loaders, and cranes will be deployed in major construction projects, reducing carbon emissions by 20 million tons annually. This shift aligns with Indias commitment to achieving net-zero carbon emissions by 2070.
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