Rationalised GST, Import Duties Key To Boosting Mining, Construction Equipment Sector: Report
(MENAFN- KNN India) A recent report by Kearney and the Confederation of Indian Industry (CII) highlights the urgent need to rationalise the goods and services tax (GST) and import duties to improve cost competitiveness in India's mining and construction equipment (MCE) sector.
The report, titled "Path to Viksit Bharat: Making India a Global Manufacturing Hub in the MCE," identifies the sector's inverted GST structure as a major challenge.
Currently, components like hydraulics and electronics are taxed at 18 per cent, while final equipment such as crawler cranes and drilling rigs attract just 12 per cent. This discrepancy increases the cost burden on manufacturers.
To unlock the sector's full potential, the report recommends streamlining taxes, setting up a national R&D consortium, and launching a startup accelerator to encourage innovation.
It also suggests raising customs duties on fully built imported equipment and implementing anti-dumping measures to protect domestic manufacturers.
Despite India's engineering strength, the MCE sector still imports around USD 2.6 billion worth of components annually, mainly from China, Japan, and Germany-leaving it exposed to global supply chain risks.
With India being the fastest-growing market in the USD 414 billion global MCE industry, the report envisions the country's sector tripling its value to USD 45 billion by 2030. This would be driven by domestic demand and rising exports.
To reach this goal, the report outlines a 10-point action plan, including green incentives for eco-friendly machines, a dedicated PLI scheme, regulatory clarity, and inclusion in export promotion programmes.
Finally, it calls for government support in free trade agreements, global certifications, and digital tech adoption to enhance India's position in the global MCE value chain.
