New Delhi, August 22: Following successful production-linked incentive (PLI) models in electronics and automotive sectors, the Indian government is set to approve a $1.2 billion incentive scheme aimed at strengthening domestic manufacturing capacity for heavy construction and infrastructure equipment, a report by Reuters said.
This would be a big boost to India’s construction and infrastructure equipment market, which is currently growing at an 8.1% CAGR as the country boosts spending on roads, metros, airports and other infrastructure amid rising demand and economic activity.
The proposed scheme aims to attract $1.8 billion in investments over seven years to domestic manufacturers to develop capacity for tunnel boring machines, fire fighting equipment and elevators in high rise buildings, given that most of this equipment is currently imported, mostly from China.
The scheme aims to boost local value addition for these high tech, specialised equipment as India looks to develop its manufacturing capabilities on the lines of its Production Linked Incentive (PLI) scheme.
This incentive plan could benefit state run BEML, Larsen and Toubro and Johnson Lifts, major players in the infrastructure segment. The plan would also include provisions to assemble machines that are presently fully imported.
A final decision on the incentive plan is expected soon, according to sources interviewed by Reuters. The Ministry of Heavy Industries and Finance did not respond to a request for comment on this development.
