MCE Industry eyes $25B market, 80% localisation by 2030

India’s mining and construction equipment (MCE) sector is projected to grow into a US$ 25 billion market by 2030, with localization expected to reach 70–80% in the next 5–7 years. This shift could save US$ 3 billion in foreign exchange annually and boost export potential. Supported by the PLI scheme and geopolitical shifts like the China+1 strategy, the sector aims to reduce import dependence.

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India’s mining and construction equipment (MCE) industry is set for rapid expansion, with localisation levels projected to rise to 70–80% over the next 5–7 years, according to a report by ICRA. This shift could potentially save the sector around US $3 billion in foreign exchange annually and improve India’s cost competitiveness, enhancing export opportunities.

Driven by infrastructure-led growth, the MCE sector has achieved a compound annual growth rate (CAGR) of 12% over the last decade (FY2015–FY2024), with sales reaching 1.36 lakh units in FY2024. Projections suggest the industry could grow into a US $25 billion market by 2030. “This growth could translate into approximately US $3 billion in forex savings annually,” the report highlighted.

ICRA emphasized that achieving these targets will require building a strong domestic supply chain. A robust supply chain is essential for realising the MCE industry’s Vision 2030, which aims to make India the world’s second-largest MCE market and position it as a global hub for manufacturing and exports.

Several factors are driving localisation efforts. The government’s Production Linked Incentive (PLI) schemes, particularly for specialty steel and auto components, are encouraging domestic manufacturing. Additionally, shifts in global geopolitical dynamics, such as the China+1 strategy, are motivating original equipment manufacturers (OEMs) to invest more in India.

The government is also working to enhance ease of doing business and improve infrastructure, further boosting the competitiveness of domestic manufacturers. However, the sector remains heavily dependent on imports, with approximately 50% of components by value sourced from OEMs in countries like China, Japan, South Korea, and Germany. Moreover, the industry relies on imported raw materials such as specialty steel, underscoring the need for a more self-reliant ecosystem.