Domestic equipment sales fell about 7% as fewer new projects meant fewer machines on site. Industry expects only a gradual recovery in FY27.
New Delhi | India's construction equipment industry is feeling the effect of slower highway awards. National highway project awards dropped to their lowest level in seven years in FY26 (April 2025 to March 2026), and equipment sales followed.
According to an analysis by Nuvama Institutional Equities, the National Highways Authority of India (NHAI) awarded 3,124 km of projects in FY26. That is below its own target of about 4,500 km and far below the 6,300 km awarded in FY23. Together with MoRTH, total awards were about 7,000 km, down 7% from the previous year and well short of the 12,000 km or more awarded each year in FY22-23. Overall road construction fell 12% in FY26, after a 14% fall in FY25.
Equipment sales feel the pinch
Data from ICEMA, the industry body for equipment makers, shows the effect:
• Total sales: 1,36,995 units, down about 2%
• Domestic sales: 1,13,229 units, down about 7%
• Exports: up about 32%, which cushioned the overall figure
• Earthmoving equipment: about 71% of the market, down 2%
• Road construction equipment: up 6.3% to 7,445 units
ICEMA President Deepak Shetty said the dip reflects slower infrastructure execution on the ground and not a structural weakness in the industry.
Why awards slowed
Delays in land acquisition remain the main reason. Officials have said they now prefer to complete land, forest clearances and utility shifting before floating tenders. NHAI has also cut its outstanding debt by about 43% from its peak, which has made new awards more selective.
Other factors added pressure on equipment buyers. These included delayed contractor payments, tighter financing, higher machine prices after the CEV-V emission norms came into force in July 2025, and uneven activity across states.
What it means for machine utilisation
When fewer new sites open, existing machines compete for less work, and idle hours rise. Utilisation, meaning the share of time a machine actually works, tends to fall first in regions where project pipelines are thin.
There is a possible upside. Projects awarded after land and clearances are in place are likely to start faster and face fewer stoppages, which could support steadier machine hours once they begin. This is MachanX's reading of the data, not an official forecast.
Outlook for FY27
The government has set a record ₹12.2 lakh crore for infrastructure capital spending in the 2026-27 Budget, but turning that into work on site depends on awards, land and payments. The reported FY27 highway construction target of about 10,000 km is flat compared with last year. ICRA expects industry growth of about 3-5% in FY27, which points to a slow recovery.
Industry watchers will track quarterly award numbers, land clearance progress, contractor payment cycles and ICEMA's quarterly sales data for early signs of a turnaround.