Daijiworld Media Network - New Delhi

New Delhi, Jul 15: India’s mining and construction equipment (MCE) industry saw a modest year-on-year growth of 2–5% in volumes during the first quarter of FY2026, according to a new report by ICRA, citing preliminary data from the Indian Construction Equipment Manufacturers Association (ICEMA).

Total volumes are expected to range between 1.43–1.47 lakh units, representing a marginal 1% YoY decline. While domestic sales contracted by 4%, the sector found support in a robust 31% growth in exports, particularly in backhoe loaders, excavators, and skid steer loaders, which together accounted for 76% of total export volumes.

ICRA attributes the sluggish domestic performance to a mix of factors, including the early monsoon, unseasonal rains, and slower project execution under schemes like the Jal Jeevan Mission (JJM) and road construction programs, affecting demand for earthmoving equipment— the core of the MCE segment.

“The flat production numbers from Coal India Limited reflect the broader disruption in construction and mining caused by unpredictable weather,” noted Ritu Goswami, Sector Head, Corporate Ratings at ICRA.

Looking ahead, ICRA expects new project awards to pick up in Q2 FY26, driven by increased government spending. With Rs. 11.2 lakh crore earmarked for capital expenditure in FY2025–26, schemes like PMGSY, JJM, and PMAY-Gramin are likely to spur activity.

While demand is expected to recover on the back of infrastructure and warehousing growth, rising costs due to stricter CEV-V emission norms could pressure margins for equipment manufacturers.

The report also emphasized India’s growing presence in global markets, with the United States ranking among the top five destinations for Indian-manufactured MCE exports.