Cement industry in India

Indian cement demand is projected to grow by 6-7% in FY25, following a strong 7-8% YoY growth in the last quarter of FY24

Advantage India

Robust
Demand

*India’s cement sector is set for robust growth in FY26, with operating profit expected to rise 12-18% to Rs. 900-950 (US$ 10.14-10.71) per metric tonne (MT), according to ratings agency ICRA. Strong demand from housing and infrastructure, better realisations, and stable input costs will drive the improvement.

*In FY25, India’s cement production rose to about 453 million tonnes, up from 426.29 million tonnes in FY24, registering a 6.3% YoY growth.

*India's cement industry, as per CRISIL Ratings, plans to increase its capacity by 150-160 MT between FY25 and FY28, building upon the 119 MT annual capacity addition over the last five years, to cater to growing infrastructure and housing demands.

*The GST revamp announced in September 2025 is expected to reduce cement prices by Rs. 30-35 (US$ 0.34-0.40) per 50-kg bag, lowering construction costs and potentially stimulating demand further in the sector.

Attractive
Opportunities

*As of August 2025, the Mumbai-Ahmedabad Bullet Train Corridor is significantly boosting the cement and construction industry, utilizing around 20,000 cubic meters of cement daily—equivalent to eight 10-story buildings. This project, spanning 508 km with multiple stations and tunnels, has generated substantial employment, with about 20,000 workers engaged daily.

*Government has plans for 33.4% outlays for capital investments to Rs. 10 lakh crore (US$ 120 billion) and outlays for railways of Rs. 2.4 lakh crore (US$ 29.05 billion). Also, plans to build 100 new significant transport projects involving an investment of Rs. 75,000 crore (US$ 9.04 billion) for end-to-end connectivity for ports, coal, steel etc.

*Karnataka approved investment proposals worth Rs. 17,183 crore (US$ 2.01 billion) in cement manufacturing, which are expected to generate around 12,500 jobs.

Long-term
Potential

*Indian cement companies are among the world’s greenest cement manufacturers.

*India's top four cement companies - UltraTech, ACC-Ambuja, Shree Cement, and Dalmia Cement are set to add over 42 million tonnes of capacity in FY25, increasing their market share from 48% in FY23 to an expected 54% by FY26.

*Indian cement makers plan to invest around Rs. 1.25 lakh crore (US$ 14.63 billion) between FY25 and FY27 to add 130 million tonnes of grinding capacity about 20% more than current levels.

*The government's infrastructure push is a significant catalyst, with projects like the Mumbai-Ahmedabad Bullet Train Corridor significantly boosting cement demand. This project alone uses around 20,000 cubic meters of cement daily, generating large-scale employment.

Increasing
Investments

*FDI inflows in the industry, related to the manufacturing of cement and gypsum products, reached Rs. 51,135 crore (US$ 7.92 billion) between April 2000-June 2025.

*National Infrastructure Pipeline (NIP) introduced projects worth Rs. 102 lakh crore (US$ 14.59 billion) for the next five years.

*As per the Union Budget 2025-26, the government approved an outlay of Rs. 2,87,333 crore (US$ 33.08 billion) for the Ministry of Road Transport and Highways i.e., 3% higher as compared to the previous budget.

*India’s top cement producers are set to invest about Rs. 1,20,000 crore (US$ 13.53 billion) in capital expenditure between FY26 and FY28, nearly 50% higher than the previous three years, according to Crisil Ratings. The investments will focus primarily on capacity expansion, with the 17 companies covered in the report representing 85% of the country’s total 668 million tonnes (MT) of installed capacity as of March 2025.

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Last updated: Nov, 2025

Cement Industry Report

Nov, 2025

Introduction

India is the second-largest cement producer in the world, accounting for more than 8% of global installed capacity. With abundant limestone reserves and coal availability, the country has a strong resource base to support expansion. The cement industry is positioned to benefit significantly from India’s infrastructure and housing boom, with rising rural housing demand, affordable housing schemes, and rapid urbanisation driving sustained consumption.

Government-led initiatives such as the development of 98 smart cities, increased allocations for infrastructure, and large-scale housing programmes are creating a steady pipeline of demand. Rural housing now accounts for nearly one-third of cement consumption, while urban housing is witnessing renewed momentum. On the industrial front, demand is being reinforced by growth in manufacturing and large infrastructure projects, including highways, metro networks, and industrial corridors.

India has also attracted significant foreign investment in the sector, with global players such as LafargeHolcim, Heidelberg Cement, and Vicat entering the market. Policy support, coupled with the industry’s ongoing consolidation and capacity expansion,

underpins long-term growth prospects. With rising demand, robust supply chains, and increasing focus on sustainability, India’s cement industry is set to remain a cornerstone of the country’s economic development.

Market Size

As of March 2025, India had 210 large cement plants, with 77 concentrated in Andhra Pradesh, Rajasthan, and Tamil Nadu. Nearly 32% of cement production capacity is based in South India, followed by 20% in North India, 15% in West, 13% in Central, and the remaining 20% in East India. The sector benefits from abundant limestone deposits across the country, ensuring a strong resource base for expansion.

In FY25, total cement volumes reached 453 million tonnes, up 6.3% YoY. March 2025 alone recorded volumes of 46.5 million metric tonnes, a 12% rise compared to last year. In May 2025, the industry grew by 9% YoY, reaching 39.6 million metric tonnes, with private players such as Ultratech and Adani driving volumes. Prices rose 8% YoY, reflecting strong demand and pricing power of dominant firms. India’s cement sector is set for robust growth in FY26, with operating profit expected to rise 12-18% to Rs. 900-950 (US$ 10.14-10.71) per metric tonne (MT), according to ratings agency ICRA. Strong demand from housing and infrastructure, better realisations, and stable input costs will drive the improvement.

Southern India posted a Rs. 10 (US$ 0.11) per bag price increase in August 2025 despite the monsoon season, underscoring resilient demand. Cement traffic at Indian ports was 2.98 MMT in April–July 2025 compared to 2.22 MMT in the same period of 2024. Similarly, the Northeast Frontier Railway recorded a 71% YoY surge in cement freight during April–July 2025, supported by the expansion of regional infrastructure projects.

A 10% increase in central infrastructure spending, coupled with an 11% rise in allocations across 12 major states as of May 2025, is fueling a surge in housing and infrastructure projects nationwide. Rural housing, supported by higher farm incomes and targeted government schemes, now accounts for 32–34% of total demand, while urban housing is rebounding on the back of PMAY-Urban and lower interest rates.

India’s cement consumption stood at 445 MMT in FY24 and is projected to rise to 670 MMT by 2030, supported by a strong 7–8% CAGR through FY26. Consumption is expected to reach 450.78 MMT by FY27.

In FY25, the industry’s operating profit before interest, depreciation, tax, and amortisation (OPBIDTA) stood at Rs. 806 (US$ 9.08) per MT. ICRA’s analysis covers major players such as ACC, Ambuja Cements, UltraTech Cement, Dalmia Bharat, and Shree Cement, representing 74% of industry capacity

To cater to this demand, India’s cement makers are planning significant capacity additions. CRISIL Ratings projects 150–160 MT of capacity to be added between FY25 and FY28, building on 119 MT added over the past five years. According to ICRA, 43–45 MTPA is expected in FY26, up from 32–35 MTPA in FY25. Indian cement makers are set to invest Rs. 1.25 lakh crore (US$ 14.63 billion) between FY25 and FY27 to add around 130 MT of grinding capacity, representing about 20% more than current levels.

Moody’s notes that growing cement demand will accelerate industry consolidation, with the top 10 players expected to acquire 140 MT of capacity over five years, worth Rs. 89,000 crore (US$ 10.4 billion). Karnataka alone approved investment proposals worth Rs. 17,183 crore (US$ 2.01 billion) in cement manufacturing, expected to generate around 12,500 jobs.

On the trade front, India exported panel cement, clinkers, and asbestos cement products worth Rs. 5,845 crore (US$ 685.12 million) in FY25, while imports stood at Rs. 1,543 crore (US$ 181.23 million).

Major projects continue to act as demand multipliers. The Mumbai–Ahmedabad Bullet Train Corridor, spanning 508 km, is consuming about 20,000 cubic meters of cement daily, equivalent to building eight 10-story buildings every day. The project has generated substantial employment, engaging nearly 20,000 workers daily across stations, tunnels, and related infrastructure.

Investments

In August 2025, JSW Cement announced plans to triple its manufacturing capacity to 60 MTPA over the coming years, supported by an IPO worth Rs. 3,600 crore (US$ 408 million). The company, which had recently expanded its capacity to 20.6 MTPA at Salboni, aims to leverage JSW Group’s rail and port infrastructure and green mobility initiatives to cut logistics costs. It is also evaluating the acquisition of a 37.9% stake in Orient Cement, which would lift capacity to 26 MTPA by FY26.
India’s top cement producers are set to invest about Rs. 1,20,000 crore (US$ 13.53 billion) in capital expenditure between FY26 and FY28, nearly 50% higher than the previous three years, according to Crisil Ratings. The investments will focus primarily on capacity expansion, with the 17 companies covered in the report representing 85% of the country’s total 668 million tonnes (MT) of installed capacity as of March 2025.
UltraTech Cement has been equally aggressive, acquiring the cement business of Kesoram Industries in February 2025, raising its capacity to nearly 189 MTPA. The company has set aside Rs. 32,400 crore (US$ 3.89 billion) over three years to reach 200 MTPA by 2027, with recent greenfield projects adding 5.4 MTPA. In FY25, it commissioned 17.4 MTPA of new capacity, including a bulk terminal in Lucknow, and added 269 MW of renewable power, taking its green energy portfolio to 1.36 GW. It has also deployed CNG/LNG fleets and plans 500 electric trucks by mid-2025, targeting 85% green energy usage by 2030. In October 2025, UltraTech announced a major investment of Rs. 10,255 crore (US$ 1.2 billion) to expand production capacity by 22.8 MTPA in a segment experiencing consolidation, reinforcing its growth ambitions.
Dalmia Bharat has been expanding steadily, increasing capacity at its Kadapa plant to 3.6 MTPA and unveiling a Rs. 3,000 crore (US$ 340 million) capex plan for FY26. In June 2025, the company committed Rs. 3,520 crore (US$ 399 million) to Phase II expansion, with new plants in Pune and Belgaum adding 6 MTPA by FY28, taking overall capacity towards its 75 MTPA medium-term target.
Shree Cement has also accelerated growth, commissioning new grinding units in Etah and Baloda Bazar in April 2025 to raise capacity to 62.8 MTPA. It is investing Rs. 7,000 crore (US$ 844 million) for a 12 MTPA expansion, targeting 80 MTPA by FY28, while green power capacity reached 582 MW in FY25.
Ambuja Cements, part of the Adani Group, crossed the 100 MTPA mark in FY25 and aims for 140 MTPA by FY28. It acquired Penna Cement for Rs. 10,422 crore (US$ 1.24 billion), boosting its presence in South India, and has announced Rs. 6,000 crore (US$ 721 million) investment in 1,000 MW of renewable energy in Gujarat and Rajasthan. The company has already added 299 MW of renewable capacity in FY25 and continues to scale up its circular economy initiatives.
ACC, another Adani subsidiary, crossed the 100 MTPA milestone in April 2025 after acquiring the remaining stake in Asian Concretes and Cements. It reported record volumes of 42.2 MT in FY25 and raised green power use to 22.5%, with plans to reach 60% by FY28.
Ramco Cements has outlined a Rs. 1,403 crore (US$ 168 million) expansion, doubling capacity at its Kalavatala plant and adding a 10 MW waste heat recovery system. With a strategy to grow cement capacity to 30 MTPA by mid-2026, the company also launched "Hard Worker," a construction chemicals brand targeting Rs. 2,000 crore revenue in four to five years.
HeidelbergCement India is focusing on green power, with its Narsingarh and Ammasandra plants running on 40% and 90% renewable energy, respectively. It is also expanding capacity with investments of over US$ 259 million in its Jhansi grinding unit. Meanwhile, multiple bidders including UltraTech, Adani, JSW, and Dalmia are in talks to acquire its 69.39% stake valued at US$ 412 million.
Earlier, in 2024, the cement sector saw more than ten M&A deals worth over US$ 3.5 billion, the highest since 2014, driven by consolidation moves by UltraTech and Adani’s Ambuja Cements. Shree Cement and Ambuja also announced significant greenfield projects in Bihar and Uttar Pradesh, while overall PE/VC investment into real estate and infrastructure surged 70% YoY, cementing the sector’s strong growth trajectory.

Government Initiatives

In order to help private sector companies thrive in the industry, the Government has been approving their investment schemes. Some of the initiatives taken by the Government of late are as below:

The government announced PMAY Urban 2.0 operational guidelines and highlighted expanded support for one crore urban poor and middle class families over five years, including assistance of up to about Rs. 2.5 lakh (US$ 2,800) per eligible household, which is expected to stimulate demand for affordable housing and associated neighborhood retail.
Under the housing for all segment, in FY26 the budget estimate for Pradhan Mantri Awas Yojana was Rs. 19,794 crore (US$ 2.25 billion).
In August 2025, Prime Minister Mr. Narendra Modi visited Gujarat and inaugurated 1,449 houses and 130 shops constructed under PMAY Urban costing Rs. 133.42 crore (US$ 15.11 million). Additionally, a new provision was introduced in Gujarat’s PMAY (Rural) to provide Rs. 50,000 (US$ 566) additional assistance for house roof plastering, benefiting over 34,000 families.
India's cement demand is expected to sustain its growth momentum with a projected increase of 7-8% in FY26. This robust growth is driven primarily by government housing initiatives like the Pradhan Mantri Awas Yojana (PMAY) and ongoing infrastructure development projects. Supported by a revival in construction activity and increased government capital expenditure, the real estate sector's expansion will continue to fuel strong cement demand.
The GST revamp announced in September 2025 is expected to reduce cement prices by Rs. 30-35 (US$ 0.34-0.40) per 50-kg bag, lowering construction costs and potentially stimulating demand further in the sector.
The government's infrastructure push is a significant catalyst, with projects like the Mumbai-Ahmedabad Bullet Train Corridor significantly boosting cement demand. This project alone uses around 20,000 cubic meters of cement daily, generating large-scale employment.
As per the Union Budget 2025-26, the government approved an outlay of Rs. 2,87,333 crore (US$ 33.08 billion) for the Ministry of Road Transport and Highways i.e., 3% higher as compared to the previous budget. Additionally, the budget allocated Rs. 11.2 lakh crore (US$ 129.04 billion) for Infrastructure sector. To promote increased private sector involvement, the government has put forward a range of proposed initiatives.
The National Infrastructure Pipeline (NIP) expanded to 9,305 projects from 7,400 projects.
Government schemes like the Pradhan Mantri Awas Yojana (PMAY) for affordable housing and PM Gati Shakti National Master Plan for infrastructure are driving cement demand. PM Gati Shakti's focus on transport networks and PMAY's expansion will further increase cement consumption in coming years.
In October 2021, Prime Minister, Mr. Narendra Modi, launched the ‘PM Gati Shakti - National Master Plan (NMP)’ for multimodal connectivity. Gati Shakti will bring synergy to create a world-class, seamless multimodal transport network in India. This will boost the demand for cement in the future.

Road Ahead

The Indian government is firmly focused on infrastructure development to spur economic growth and is striving for full infrastructure coverage to establish smart cities. The government plans to increase the capacity of railways and the facilities for handling and storage to enable the transfer of cement and cut out on transportation costs. These measures are expected to result in increased construction activity in the country, thereby boosting demand for cement.

The eastern states of India are likely to be the newer and untapped markets for cement companies and could contribute to their bottom line in future. In the next 10 years, India could become the main exporter of clinker and grey cement to the Middle East, Africa, and other developing nations of the world. Cement plants near the ports, for instance, the plants in Gujarat and Visakhapatnam, will have an added advantage for export and will logistically be well-armed to face stiff competition from cement plants in the interior of the country. Number of foreign players are also expected to enter the cement sector owing to the profit margins and steady demand.

References: Media Reports, Press releases, Union Budget 2025-26, Edelweiss Securities Ltd., Global Cement