Union Budget 2026: New Scheme to Boost Construction and Infrastructure Equipment Manufacturing
Finance Minister Nirmala Sitharaman announced a significant initiative in her Union Budget 2026 speech, unveiling a scheme aimed at enhancing the manufacturing of construction and infrastructure equipment (CIE) in India. This initiative is designed to bolster domestic production of high-value, technologically advanced machinery, thereby reducing the country’s reliance on imports and reinforcing the Make-in-India initiative. The scheme is expected to benefit capital goods, heavy engineering, and infrastructure-linked companies as government investments in roads, railways, mining, ports, and urban infrastructure continue to accelerate.
Strengthening Domestic Manufacturing
The proposed scheme for CIE manufacturing is a strategic move to elevate India’s manufacturing capabilities in the construction sector. By focusing on high-value machinery, the government aims to create a robust domestic supply chain that can meet the growing demands of infrastructure development. This initiative aligns with the broader goals of the Make-in-India campaign, which seeks to transform India into a global manufacturing hub.
Seema Srivastava, Senior Research Analyst at SMC Global Securities, emphasized the positive implications of this announcement for various sectors. She noted that the government’s increased spending on infrastructure projects will create a favorable environment for manufacturers of capital goods and heavy engineering equipment. As the demand for advanced machinery rises, domestic manufacturers are expected to play a crucial role in meeting these needs, ultimately enhancing India’s self-sufficiency in this vital sector.
Additional Initiatives to Support Growth
In addition to the CIE scheme, the government has introduced a ₹10,000 crore container manufacturing initiative over the next five years. This program is strategically important for supporting India’s expanding export, logistics, and port ecosystem. By encouraging domestic container production, the initiative aims to lower logistics costs and create economies of scale for Indian manufacturers.
Furthermore, the budget outlines an integrated plan for the textiles sector, focusing on employment generation, value-added manufacturing, and enhancing global competitiveness. This plan targets key areas such as garments, man-made fibers, and technical textiles, which are expected to improve capacity utilization, exports, and profit margins across the textile value chain.
Stocks Expected to Benefit from New Initiatives
Market experts have identified several stocks that are likely to benefit from these new initiatives. In the construction and infrastructure equipment sector, companies such as Larsen & Toubro, Action Construction Equipment, BEML, Escorts Kubota, and Cummins India are expected to see positive impacts. For the container and logistics sectors, firms like Cochin Shipyard, Tata Steel, JSW Steel, and APL Apollo Tubes are positioned to gain. In the textile industry, KPR Mill, Arvind Ltd, Vardhman Textiles, Welspun India, and Trident are anticipated to benefit from the government’s focus on enhancing domestic manufacturing capabilities.
As these initiatives unfold, they are expected to play a pivotal role in shaping India’s manufacturing landscape, fostering growth, and enhancing the country’s competitiveness on the global stage.
