Quick Take
- The Union Cabinet is set to take up the construction equipment scheme, with a Rs 200 Cr FY27 outlay.
- The CIE scheme covers lifts, fire-fighting gear, and tunnel-boring machines, backed by a seven-year Budget commitment.
- The Ministry of Heavy Industries targets a mid-2026 notification to cut import reliance and lift local output.
In This Article
The Union Cabinet is expected to take up the construction equipment scheme soon, clearing a major step for a Rs 200 Cr ($20.8 Mn) plan to build heavy machinery at home, a senior official told The Hindu.
The Scheme for Enhancement of Construction and Infrastructure Equipment (CIE) was announced in the Union Budget 2026-27 on February 1, 2026, by Finance Minister Nirmala Sitharaman. Inter-ministerial talks are now complete, and approval is expected by August. The scheme aims to cut India’s reliance on imported machines used in metros, roads, and tall buildings.
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The Rs 200 Cr FY27 line item looks small, but it is a first-year signal, not the full pot. The Ministry of Heavy Industries has said the scheme carries a seven-year Budget allocation and targets roughly Rs 1 lakh Cr in fresh investment. That gap between the headline number and the real ambition is the story. Component makers, tunnel-boring importers, and mid-tier machinery firms should watch the fine print on domestic value-addition rules, since those thresholds will decide who wins. StartupFeed expects the final notification to land before September 2026, with localisation targets as the sharpest condition. By Harshvardhan Jain.
Construction Equipment Scheme: Key Details
The construction equipment scheme is a central-sector plan to grow domestic manufacturing of high-value machinery. The Ministry of Heavy Industries (MHI) is steering it. According to the Press Information Bureau, the scheme covers a wide range of equipment. This runs from lifts in multi-storey apartments and fire-fighting systems to tunnel-boring machines for metros and high-altitude roads.
| Metric | Detail | Notes |
|---|---|---|
| FY27 Outlay | Rs 200 Cr ($20.8 Mn) | First-year Budget line (MHI) |
| Budget Commitment | Seven years | Multi-year allocation planned |
| Investment Target | Around Rs 1 lakh Cr | MHI stated goal |
| Steering Body | Ministry of Heavy Industries | Nodal ministry for the CIE scheme |
| Notification Target | Mid-2026 | MHI Joint Secretary, March 2026 |
| Announcement Date | February 1, 2026 | Union Budget 2026-27 |
The most telling number is the Rs 200 Cr FY27 outlay. It is a starting figure, and the seven-year window shows the real weight sits in later years. The plan also pairs the scheme with Hi-Tech Tool Rooms at two CPSE sites, meant to design and test precision parts at lower cost.
About the CIE Scheme
The Scheme for Enhancement of Construction and Infrastructure Equipment (CIE) is a Government of India manufacturing programme unveiled in February 2026. The Ministry of Heavy Industries runs it from New Delhi. It supports local production of high-value construction machines, aiming to reduce imports and build India as a global manufacturing hub. Key backers include the Union Budget and industry body ICEMA (Indian Construction Equipment Manufacturers Association).
Why is the government backing this scheme now?
The government is backing the construction equipment scheme now because India still imports a large share of advanced machinery by value. A record public capital expenditure of Rs 12.2 lakh Cr for FY27 is driving demand for metros, freight corridors, and high-speed rail. Local supply has not kept pace.
“A Scheme for Enhancement of Construction and Infrastructure Equipment will be introduced to strengthen domestic manufacturing of high-value and technologically-advanced CIE,” Finance Minister Nirmala Sitharaman said in her Budget speech.
The logic is direct. Imported tunnel-borers and lifts raise project costs and can cause delays when supply chains snap. By making these at home, the government hopes to steady delivery schedules and support real estate and infrastructure execution across the country.
How big is India’s equipment market?
India’s mining and construction equipment market crossed $17 Bn (Rs 16,354 Cr) in 2025 and is growing at 10-12 per cent a year. A joint report by the Confederation of Indian Industry (CII) and Boston Consulting Group, titled “Pressing the Throttle”, called India the fastest-growing market among the world’s top six.
| Data Point | Figure |
|---|---|
| Market Size (2025) | Over $17 Bn (Rs 16,354 Cr) |
| Annual Growth | +10-12% YoY |
| MCE Capex (2025) | About Rs 5.5 lakh Cr |
| MCE Capex (2030F) | Rs 9-10 lakh Cr |
| 2047 Potential | $180-200 Bn (BCG-CII) |
The CII-BCG report noted India’s share of the global mining equipment market has doubled, from around 2.5 per cent to 4-6.5 per cent over recent years. What sets the CIE scheme apart is its focus on high-value, technology-heavy machines, the exact segment where imports still dominate.
What happens after Cabinet approval?
After Cabinet approval, the Ministry of Heavy Industries plans to issue the full scheme notification with detailed guidelines. These will fix incentives, investment commitments, and the Budget path for seven years. A mid-2026 rollout remains the target. Will Indian firms move fast enough to claim the localisation gains on offer?
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