India rolls out $1.2 billion plan to boost domestic tunnel boring and construction gear

India is on the verge of endorsing a $1.2 billion incentive package designed to foster domestic manufacturing of advanced construction and infrastructure machinery. Spanning seven years, the scheme is projected to attract roughly $1.8 billion of fresh capital by offering subsidies and setting local value-addition goals for items currently fully imported, including tunnel boring machines, fire-fighting equipment and elevators for skyscrapers.

The move follows a sharp decline in Chinese TBM imports after trade restrictions and aims to lessen dependence on Beijing’s supply chain. State-owned BEML, along with private firms Larsen & Toubro and Johnson Lifts, are identified as potential beneficiaries. The proposal, announced in the 2026-27 Union Budget, will be examined by the Union Cabinet soon, as inter-ministerial discussions have reportedly concluded.

Finance Minister Nirmala Sitharaman highlighted the broad range of equipment covered, from apartment lifts to machines for metros and high-altitude roads. Strengthening local production aligns with India’s expanding infrastructure agenda, which is driving demand for specialized machinery.