India's construction equipment industry believes that the PLI scheme if granted, may attract nearly US $4 billion of domestic and foreign investment in the near term.
03 Oct 2023 | 9136 Views | By Shahkar Abidi
Sandeep Singh, the Managing Director of Tata Hitachi, a major player in the construction equipment industry, believes that the long-awaited production-linked incentive (PLI) scheme for the sector may see some positive outcomes within the next 1-2 months.
"The government called the industry members many times for discussion. We believe ...
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Sandeep Singh, the Managing Director of Tata Hitachi, a major player in the construction equipment industry, believes that the long-awaited production-linked incentive (PLI) scheme for the sector may see some positive outcomes within the next 1-2 months.
"The government called the industry members many times for discussion. We believe that in the next 1-2 months we should be able to get some good positive output from the government on PLI," Singh told Autocar Professional.
India's construction equipment (CE) industry, which aims to achieve a US $25 billion target by 2030, believes that the PLI scheme if granted, may attract nearly US $4 billion of domestic and foreign investment in the near term. It is also likely to lead to about US $3 billion in exports from the country, apart from saving US $2.9 billion in forex savings by 2030 through import substitutions, as per the Indian Construction Equipment Manufacturers Association (ICEMA), an industry lobby. The PLI is also expected to create employment opportunities for nearly 3.2 million people, according to estimates prepared by the construction equipment industry.
Singh noted that industry representatives from the Indian Construction Equipment Manufacturers Association (ICEMA) have been actively engaged in discussions with government officials, including secretaries from the Ministry of Road Transport and Highways (MoRTH) and the Ministry of Heavy Industries (MHI), as well as representatives from Niti Ayog. These discussions have been aimed at shaping policies and initiatives to support the growth of the construction equipment industry.
ICEMA is the apex association for construction equipment manufacturers in India and represents over 90 leading companies that manufacture, trade, and finance a wide range of construction, earthmoving, concrete, mining, and material handling equipment. The CE industry stakeholders opine that to meet the emerging demand, the industry needs to increase capacity as well as reduce its dependence to become self-reliant. “Given the capital-intensive nature of the industry and to help it contribute effectively towards the infrastructure development plans of the country, it is imperative for the government to consider extending a PLI scheme for the sector,” the lobby said in its communication earlier.
According to ICEMA's Vision Plan 2030, the Indian construction equipment industry will triple its sales volume over the next ten years, reaching US$ 25 billion in revenue, with the help of the government's implementation of the Rs 111 trillion National Infrastructure Pipeline (NIP) in six years through FY25.
Deloitte, a consulting firm, has been assisting the industry in navigating these discussions, providing valuable expertise and support. Substantial amounts of data have been submitted to the government during these engagements. The proposal outlines eligibility criteria, minimum new domestic investment requirements, incentive slabs for consideration, a proposed incentive outlay, and the portfolio coverage of equipment and component investments.