Govt Plans $1.2 Billion Incentive Scheme To Boost Domestic Manufacturing Of Construction Equipment
India is preparing a major incentive programme to strengthen domestic manufacturing of high-value construction and infrastructure equipment, with the government likely to approve a $1.2 billion scheme soon. The initiative is aimed at reducing the country’s dependence on imports, particularly from China, for technologically advanced machinery. Under the proposed seven-year programme, manufacturers…
India is developing a $1.2 billion incentive program to strengthen the production of high-value construction equipment domestically, aiming to decrease reliance on imports, especially from China. This seven-year plan seeks to attract around $1.8 billion in new investments, covering machinery such as tunnel boring machines, firefighting systems, and elevators used in large infrastructure projects.
China has historically been a major supplier of such equipment for India's infrastructure projects, including metros, highways, and metro rail networks. The government will assess the level of support needed for manufacturers to make domestic production financially feasible. Potential beneficiaries include state-owned BEML, which intends to produce tunnel boring machines locally, as well as companies like Larsen & Toubro and Johnson Lifts.
The scheme also intends to boost local value addition for machinery, currently imported almost entirely. Infrastructure spending is surging in India, with the construction and infrastructure equipment market valued at approximately ₹1 trillion ($10.5 billion) and expected to grow. The move follows restrictions imposed on Chinese investments and participation in public procurement after 2020 border clashes and China's subsequent export-related restrictions on tunnel boring machines in 2024, leading to a sharp decline in imports from China.
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