Revitalizing India's MCE Industry: A Government-Driven Resurgence

The Indian mining and construction equipment sector, which faced a decline in volumes due to monsoons and reduced demand in Q1 FY2026, is poised for recovery with government initiatives driving new award activity in the latter half of the fiscal year, predicts ICRA.

The mining and construction equipment sector in India experienced a slight dip in the first quarter of the fiscal year, a situation exacerbated by early monsoons and unusual rainfall in key regions. However, according to the rating agency ICRA, the government-driven acceleration of new award activity could reinvigorate the sector in the latter half of FY2026.

Coal India Ltd's performance data also mirrored this trend, presenting a flat production profile in Q1 when compared to the previous year. The sector has similarly faced sluggishness due to slow progress in road construction and the Jal Jeevan Mission projects, which in turn affected demand for earthmovers—an essential component of this industry.

Despite a modest year-on-year growth and a four percent contraction in domestic volumes, an impressive 31 percent rise in exports kept overall sales buoyant through this period. H2 FY2026's potential to boost industry activity remains contingent, largely on continued government initiatives and industrial construction demand.

(With inputs from agencies.)