India set to approve $1.2 billion incentive plan to make building equipment, sources say
India is set to approve a $1.2-billion incentive scheme to boost domestic production of high-value construction equipment, including tunnel boring machines, and reduce import dependence on China. The programme is expected to attract $1.8 billion in investment over seven years.
New Delhi is poised to approve a $1.2 billion incentive plan to bolster domestic production of high-value, technologically advanced construction and infrastructure equipment, according to two government sources. This move aims to lessen India's reliance on China for crucial machinery, particularly tunnel boring machines, fire-fighting equipment, and elevators utilized in large-scale projects such as metro rail and highway construction.
The scheme, anticipated to be finalized shortly, seeks to attract $1.8 billion in new investment over a seven-year period, offering incentives to domestic manufacturers of such equipment. India's heavy dependence on imports, notably from China, has been a persistent challenge, prompting Prime Minister Narendra Modi's government to ramp up efforts to enhance local manufacturing capabilities.
State-owned enterprises like BEML, along with other key players like Larsen and Toubro and Johnson Lifts, stand to benefit from the incentive plan, which also incorporates targets for local value addition. The final decision on the plan is expected soon, though the federal heavy industries and finance ministries have yet to comment.
Since the 2020 border clashes with China, India has tightened restrictions on investments and public procurement from Beijing. In 2024, China restricted exports of tunnel boring machines by delaying customs clearances, causing imports to plummet to $3 million in 2023-24 from $18 million the previous year. The incentive plan aims to bridge the manufacturing gap and reduce India's high import dependency.
Written by urgent.news from The Economic Times - Economy's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
