NEW DELHI, March 12 -- The Centre is considering a 12-16% incentive on large investments to boost domestic manufacturing of construction equipment such as tunnel boring machines, cranes and crawlers, two people familiar with the discussions said.

The proposal is part of the scheme for enhancement of construction and infrastructure equipment (CIE) announced by finance minister Nirmala Sitharaman in her FY27 budget speech on 1 February. The budget allocated Rs.200 crore for the scheme to be implemented by the ministry of heavy industries.

Under the current plan, companies investing more than Rs.500 crore in construction equipment manufacturing could receive the proposed incentives, according to the people cited above, who requested anonym...