The Union Budget 2026–27 has taken a decisive step towards strengthening India’s capital goods ecosystem with the announcement of a Scheme for Enhancement of Construction and Infrastructure Equipment (CIE). The scheme is aimed at building domestic manufacturing capabilities in high-value, technologically advanced equipment, reducing import dependence and improving productivity across infrastructure projects.
The scope of the CIE scheme spans a wide range of applications, including urban mobility systems, lifts and fire-fighting equipment, metro construction machinery, tunnel boring machines, and equipment for high-altitude and underground infrastructure projects. The initiative aligns with the government’s broader push to scale up manufacturing across strategic sectors and enhance localisation in capital-intensive industries.
To strengthen precision manufacturing capabilities, the Budget also proposed the establishment of Hi-Tech Tool Rooms by CPSEs, designed as digitally enabled facilities for the design, testing and manufacturing of high-precision components at scale. In addition, the government announced a Rs 10,000 crore Container Manufacturing Scheme over five years to create a globally competitive container manufacturing ecosystem, supporting India’s trade and logistics infrastructure.
Welcoming the Budget announcements, Deepak Shetty, MD & CEO, JCB India, said, “A significant boost comes for the construction equipment industry, with a focus on domestic manufacturing of high-value capital goods such as tunnel boring machines, earthmoving equipment, and crane systems. This initiative is set to drive demand for advanced, locally produced equipment, fuel innovation, and elevate India’s position as a globally competitive hub in the construction ecosystem.”
Highlighting the demand outlook for the sector, Dheeraj Panda, Managing Director, Ammann India, said, “The Union Budget reinforces infrastructure and manufacturing as twin engines of India’s next growth phase, with central capex rising to over ₹12 lakh crore.” He added that “the announcement of execution of seven new high-speed rail corridors, multimodal logistics, freight-linked infrastructure and urban connectivity especially in tier-2 and tier-3 cities, will drive demand for high-output, reliable and technologically advanced construction equipment.”
The Budget’s focus on MSME support and cluster revival is also expected to aid equipment adoption at the contractor level. Panda noted that “MSME-focused measures like improved payment cycles, credit support, and cluster revival will enable smaller contractors to modernise fleets and adopt advanced plants and pavers to cater to the changing infrastructural needs.”
Echoing the significance of the CIE scheme, Shalabh Chaturvedi, Managing Director, India & SAARC region, CASE Construction Equipment, said, “The announcement of the Scheme for Enhancement of Construction and Infrastructure Equipment is a landmark step for the industry.” He further stated that “the planned development of City Economic Regions, new freight corridors, and expansion of national waterways under the PM Gati Shakti programme will drive demand for advanced construction equipment.”
Together, the CIE scheme, precision manufacturing support, and container manufacturing push are expected to strengthen domestic supply chains, accelerate technology adoption, and reinforce India’s Make-in-India and Aatmanirbhar Bharat objectives in the construction equipment and capital goods sector.