ROAD CONSTRUCTION: UP FOR A SWING?

With road project awarding expected to rise, 2026 is set for a demand recovery and volume growth in India's road construction equipment market.

- By Team CW

India's road construction equipment market entered 2026 after an unusually disrupted year.

The first seven months of FY2026 saw a 12% year-on-year decline in road execution, with the Ministry of Road Transport and Highways (MoRTH) building 3,468 km between April and October 2025, compared with 3,920 km in the same period in 2024, according to a report by ICRA. Awarding activity has also remained slow, with ICRA projecting 8,500–9,000 km of road awards in FY2026, only a modest improvement over FY2025 levels. These numbers frame a challenging near-term environment for contractors and equipment manufacturers alike.

However, across the industry, there is a growing optimism among construction equipment makers that 2026 will mark a measured turning point rather than a continuation of the downturn. Senior industry suggest that while volumes may not surge, execution intensity, utilisation rates, and selective replacement demand are likely to improve. This revival is likely to be influenced not only by the clearing of backlogs, but also by structural shifts in localisation, decentralised project execution, growing participation by smaller contractors, and rising adoption of refurbished, rental, and buyback options offered to customers.

THE BACKDROP

ICRA’s assessment highlights how the calendar year 2025 and early FY2026 were shaped by a confluence of disruptive factors. The agency points to reduced awarding, elongated project cycles, and execution slowdowns, alongside macro-level disruptions. While road construction projects dipped by 12% in the first seven months of 2025, project executions by the National Highways Authority of India (NHAI) dropped by 16% in FY2025. While near-term construction activity was sluggish, the toll road fundamentals, however, seemed to remain stable.