India construction boom hits a steel, bitumen wall

In India, the construction boom is encountering challenges as steel and bitumen prices soar, according to Shalabh Chaturvedi, Vice President of the Indian Construction Equipment Manufacturers Association. The industry had anticipated robust growth for the fiscal year 2027, but recent events have prompted a more cautious outlook.

Chaturvedi explained that escalating input costs, particularly steel and bitumen prices, have impacted project economics, especially for contractors who had previously bid on projects before the price hikes. The bitumen price, critical for road construction, has surged from Rs 40,000-45,000 per tonne to nearly Rs 80,000 per tonne, although it has since eased to around Rs 75,000 per tonne.

Despite these cost increases, the sales of construction equipment across various categories have seen modest growth during the January-July 2026 period. However, this growth has been more subdued than initially expected. Chaturvedi noted that the industry's performance for the rest of the financial year will heavily depend on infrastructure execution, commodity prices, financing conditions, and the geopolitical landscape.

The Indian Construction Equipment Manufacturers Association, the apex industry body, reported that total sales of construction equipment in India reached 1,36,995 units in 2025-26, a 2 percent decline compared to the previous year. While domestic sales dropped around 7 percent to 1,13,229 units due to slower infrastructure execution and cautious buying sentiment, exports grew by approximately 32 percent, bolstering the industry's overall performance.