Domestic Manufacturing of Heavy Earth Moving Machinery (HEMM)

GS Paper III Indian Economy

Context:

The government may consider introducing a Production-linked incentive (PLI) scheme for Heavy Earth Moving Machinery (Hemm) and underground mining equipment.

High-Level Committee: An interdisciplinary high-level committee headed by the technical director of Coal India Ltd (CIL) was set up to recommend bolstering domestic manufacturing of Heavy Earth Moving Machinery and underground mining equipment. It has submitted its final report to the coal ministry.
High Import Bill: Currently, CIL imports high-capacity equipment valued at ₹3500 crores, incurring additional expenses of ₹1,000 crores in customs duty.

Heavy Earth Moving Machinery

- To curb these imports and boost domestic manufacturing, CIL aims to encourage and develop domestically manufactured equipment to phase out imports gradually over the next six years.
Domestic manufacturers: Have been identified for producing mining equipment and the upgradation of technology and capacity.

India Construction Equipment Market:

According to the Arizton Advisory and Intelligence, India’s construction equipment market is expected to grow at a CAGR of over 8% from 2022 to 2028 and is expected to reach over $7.5 billion by 2028 from $5.2 billion in 2022.
Reason: The growth in construction equipment is driven by government investment in infrastructure, mining, and renewable energy projects.
Rising demand for Mini Excavators and Electric Mobility Equipment: According to the Indian Construction Equipment Manufacturers Association (ICEMA), demand for electric equipment for commercial use is estimated to increase 15 times in the next six months.

Committee Recommendation: The committee has recommended a five-year incentive scheme to boost domestic manufacturing of this equipment, which is largely being imported.
- Tenders for sourcing mining equipment by domestic coal and mineral mining companies come with a ‘make in India’ clause.
- Standardized Equipment: The equipment used should be standardized to boost domestic manufacturing.
Projection on Coal: The committee projected that coal will remain the predominant energy source even beyond 2030, and a huge requirement of Heavy Earth Moving Machinery in the next 10 years.
Promotes ‘Make in India’: The coal ministry aims to create a robust ecosystem that supports innovation, empowers the workforce, and strengthens the economy.
- Aligned with the core principles of Atmanirbhar Bharat, the government proposed a new ₹12,000 crore PLI scheme that would aim to reduce import dependence and create jobs in a sector that is key to rapid infrastructure development.
Further Readings: PLI Scheme