The Indian construction equipment market is projected to touch $23 billion by 2020, according to a study prepared by Accenture. Speaking to the media on the eve of the sixth International Construction Equipment and Construction Technology-EXCON 2011 which commences in Bangalore on Wednesday, Vipin Sondhi, Chairman of the trade fair and Managing Director and CEO, JCB India Ltd, said the industry had registered a compounded annual growth rate of 18 per cent during 2006-10. The size of the industry was estimated at $3.3 billion in 2010, he added.
The fair, which is being organised by the Confederation of Indian Industry (CII), concludes on November 27. It has attracted more than 630 exhibitors, including 200 foreign companies. Country pavilions from China, Finland, Germany, Italy, Japan, South Korea and Turkey will be put up at the fair, Mr. Sondhi said.
Asked whether the successive hikes in interest rates and the fears of an economic slowdown have dampened spirits, Mr. Sondhi said, “The times are uncertain but exhibitors are still interested because they have a long-term view of the country's potential.” “Although liquidity is available, funds are costlier now,” he said. “Our understanding is that interest rates and commodity prices such as oil and steel have peaked,” he said. Admitting that “the headwinds are constraining growth,” Mr. Sondhi said, “More infrastructure projects are likely, but at a higher cost.”
“There are now more component suppliers to the construction equipment manufacturers, which has reduced imports,” Mr. Sondhi said. He said this had cushioned the industry from the threat of currency volatility.
Mr. Sondhi expressed the hope that the land acquisition bill would be passed during this session of Parliament. This, he said, would reduce uncertainties.
A “rational” tax like the Goods and Services Tax (GST) would enable efficient movement of equipment to areas where they were needed for projects, he said.
He said the infrastructure sector needed a dispute resolution mechanism that is quick.