Input cost surge, supply chain disruptions cloud India construction equipment outlook

India's construction equipment manufacturers are bracing for slower growth in FY27 as escalating input costs and external headwinds outweigh earlier optimism, according to industry officials.

Shalabh Chaturvedi, Vice President of the Indian Construction Equipment Manufacturers' Association and Managing Director for India and SAARC at CASE Construction Equipment, said the sector entered the financial year anticipating robust double-digit growth. However, intervening developments have prompted a significant recalibration of expectations.

"We are now looking at more moderate, single-digit growth," Chaturvedi said. While still representing expansion, the revised forecast reflects the challenging operating environment facing manufacturers. Surging prices of key raw materials, particularly steel and bitumen, have emerged as a critical constraint on profitability and expansion plans.

Beyond commodity costs, geopolitical uncertainties and persistent execution challenges in infrastructure projects are further dampening growth prospects. Disruptions in global supply chains, particularly stemming from developments in West Asia, have compounded pressures on manufacturers already grappling with elevated input expenses.

These headwinds arrive as India's construction sector seeks to maintain momentum on ambitious infrastructure initiatives. The construction equipment industry plays a crucial role in supporting these efforts, making the sector's performance a barometer for broader investment trends.