Advantage India
Robust
Demand
*In FY26, the industry’s operating profit before interest, depreciation, tax, and amortisation (OPBIDTA) is estimated at Rs. 900–950 (US$ 10.18–10.75) per metric tonnes (MT), according to ratings agency ICRA. Strong demand from housing and infrastructure, better realisations, and stable input costs will drive the improvement.
*In FY26, India's cement production volumes reached 491.4 million metric tonnes (MT), up from 453 million tonnes in FY25, registering an estimated 8.6% 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.
*Average cement prices increased by approximately 2% year-on-year to Rs. 345 per bag in FY26. Looking ahead, ICRA expects cement volumes to grow by 7–8% in FY27, supported by sustained demand from the housing and infrastructure sectors, although profitability may remain under pressure due to elevated input costs.
Attractive
Opportunities
*In Union Budget 2026-27, the Government allocated a record Rs. 12.2 lakh crore (US$ 138.04 billion) towards capital expenditure to accelerate infrastructure development across roads, railways, logistics, urban infrastructure and industrial corridors, thereby creating significant demand opportunities for cement manufacturers.
*Indian Railways approved projects covering over 6,000 km of railway network with a total planned investment of Rs. 1.53 lakh crore (US$ 17.31 billion), aimed at expanding capacity, improving connectivity and enhancing freight efficiency, thereby creating significant incremental demand for cement from railway infrastructure development.
*Odisha approved cement plant investment proposals by NCL Industries and Dalmia Cement worth Rs. 2,000 crore (US$ 0.23 billion) each, which are expected to generate around 2,000 jobs.
Long-term
Potential
*Indian cement companies are among the world’s greenest cement manufacturers.
*India's major cement producers continued their aggressive expansion strategies in FY26, with companies such as UltraTech Cement, Ambuja Cements-ACC, Shree Cement, and Dalmia Bharat undertaking significant capacity additions across key regions. The expansion is expected to further consolidate the industry and strengthen the market position of large players amid robust demand from infrastructure and housing sectors.
*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. 52,400.86 crore (US$ 8,062.12 million) between April 2000 and March 2026.
*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 2026-27, the government allocated Rs. 3.09 lakh crore (US$ 34.96 billion) to the Ministry of Road Transport and Highways, reflecting an around 8% increase over the previous budget.
*According to CRISIL Ratings, India's leading cement manufacturers are expected to invest approximately Rs. 1.2 lakh crore (US$ 13,579.27 million) between FY26 and FY28, marking a nearly 50% increase compared to the previous three-year period. The investments will primarily be directed toward capacity expansion, with the industry expected to add around 150–160 MTPA of capacity by FY28 to cater to growing demand from infrastructure and housing sectors.
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
India’s cement industry had an installed capacity of nearly 700 million tonnes per annum (MTPA), with manufacturing facilities concentrated in limestone-rich states such as Andhra Pradesh, Rajasthan, Tamil Nadu, and Karnataka. South India accounts for the largest share of installed cement capacity at approximately 32%, followed by North and East India at around 20% each, West India at 15%, and Central India at 13%. The industry continues to benefit from abundant limestone reserves across the country, providing long-term raw material security for future expansion.
In FY26, cement production volumes increased by 8.6% YoY to 491.4 million metric tonnes (MT). Production volumes further grew by 9.4% YoY to 42.8 million MT in April 2026. Average cement prices increased
by 2% YoY to Rs. 345 per bag in FY26 and rose by approximately 4% month-on-month to Rs. 350 per bag in April 2026, supported by sustained demand from the housing and infrastructure sectors. ICRA expects cement volumes to grow by 7–8% in FY27.
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.
India’s cement sector is expected to maintain healthy growth momentum, with cement production volumes increasing by 8.6% YoY to 491.4 million metric tonnes (MT) in FY26. Looking ahead, cement volumes are expected to grow by 7–8% in FY27, supported by sustained demand from the housing and infrastructure sectors. Average cement prices increased by 2% YoY to Rs. 345 per bag in FY26, while operating margins are likely to moderate by 200–400 basis points in FY27 due to elevated fuel, freight, and other input costs.
India’s cement production volumes increased by 8.6% YoY to 491.4 million metric tonnes (MT) in FY26. Looking ahead, cement volumes are expected to grow by 7–8% in FY27, supported by sustained demand from the housing and infrastructure sectors, ongoing government-led capital expenditure, and continued growth in residential construction activity. ICRA expects the industry’s OPBIDTA/MT to increase to Rs. 900–950 (US$ 10.18–10.75) per MT in FY26, before moderating to Rs. 820–870 (US$ 9.28–9.84) per MT in FY27 due to higher fuel and freight costs.
ICRA’s analysis covers major players including ACC, Ambuja Cements, JK Cements, JK Lakshmi Cement, The Ramco Cements, UltraTech Cement, Dalmia Bharat, Birla Corporation, Shree Cement, Sagar Cements, and Heidelberg Cement India, collectively accounting for around 74% of the industry’s installed 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 cement, clinker and asbestos cement products worth US$ 467.22 million during FY26, while imports stood at US$ 170.79 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 May 2026, Dalmia Bharat acquired key cement assets of Jaiprakash Associates Limited for an enterprise value of approximately Rs. 2,850 crore (US$ 322.51 million). The acquisition is expected to strengthen the company's presence in Central India and support its long-term strategy of expanding cement capacity to 75 MTPA by FY28.
- In April 2026, UltraTech Cement Limited surpassed 200 million tonnes per annum (MTPA) of installed cement manufacturing capacity in India following the commissioning of three new grinding units with a cumulative capacity of 8.7 MTPA in Uttar Pradesh, Jharkhand, and Andhra Pradesh. With this milestone, the company became the world's largest cement producer by sales volume and capacity outside China. UltraTech's domestic cement capacity reached 200.1 MTPA, while its global capacity increased to 205.5 MTPA.
- In February 2026, Shree Cement commissioned a 3.0 MTPA cement line at its integrated project in Jaitaran, Rajasthan, taking its installed cement capacity in India to 65.8 MTPA. The company also said work at its 3.0 MTPA Kodla project in Karnataka is nearing completion, while its long-term capacity target remains above 80 MTPA.
- In February 2026, Dalmia Bharat signed an MoU with the Government of Tamil Nadu to invest Rs. 225 crore (US$ 25.46 million) in a bulk terminal project in Ranipet district. The project will create an estimated 3 MTPA handling facility, strengthen the company’s logistics footprint in South India, and is expected to be commissioned by Q1 of FY28.
- In January 2026, UltraTech Cement commissioned 1.8 MTPA of additional grey cement capacity through expansions at its Dhule Cement Works in Maharashtra and Nathdwara Cement Works in Rajasthan, taking its domestic grey cement capacity to 188.66 MTPA. The company also initiated the next phase of expansion to add 22.8 MTPA, which will take its total capacity to 240.76 MTPA upon completion.
- In January 2026, Ambuja Cements operationalised its 2.4 MTPA Marwar grinding unit in Rajasthan, raising its total cement capacity to 109 MTPA. The company said it remains on track to reach 115 MTPA by March 2026, while its broader expansion programme continues to support its long-term target of 155 MTPA by FY28.
- According to CRISIL Ratings, India's leading cement manufacturers are expected to invest approximately Rs. 1.2 lakh crore (US$ 13,579.27 million) between FY26 and FY28, marking a nearly 50% increase compared to the previous three-year period. The investments will primarily be directed toward capacity expansion, with the industry expected to add around 150–160 MTPA of capacity by FY28 to cater to growing demand from infrastructure and housing sectors.
- 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 January 2026, UltraTech Cement announced a Rs. 2,000 crores (US$ 226.32 million) capital expenditure plan for its subsidiary, India Cements, over the next two years. The investment will focus on capacity enhancement, energy-efficiency upgrades, waste heat recovery systems, digitisation initiatives, and increasing green power consumption from 5% in FY25 to around 80% by FY29.
- 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.
- 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.
- 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.
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:
- Under PMAY-Urban 2.0, the Government continues to target support for one crore urban poor and middle-class families over five years, with financial assistance of up to Rs. 2.5 lakh (US$ 2,828.69) per eligible household. In February 2026, the Government approved 2.88 lakh additional houses under the scheme, taking the total sanctioned houses to 13.61 lakh.
- Under the housing for all segment, the Union Budget 2026–27 allocated Rs. 54,916.7 crore (US$ 6.21 billion) for Pradhan Mantri Awaas Yojana-Gramin (PMAY-G) to support rural housing development across the country.
- 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 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.
- PM Gati Shakti continues to support integrated infrastructure planning and execution across the country, with the Network Planning Group evaluating 352 infrastructure projects worth Rs. 16.10 lakh crore (US$ 182.17 billion). Additionally, the Government allocated Rs. 5,000 crore (US$ 565.74 million) as a 50-year interest-free loan to States for infrastructure development under the PM Gati Shakti initiative.
- 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.
Road Ahead
India’s cement sector is expected to maintain strong medium-term growth, supported by sustained Government focus on infrastructure development, housing construction, and logistics expansion under programmes such as PM Gati Shakti and the National Infrastructure Pipeline. With public capital expenditure rising to Rs. 12.2 lakh crore (US$ 138.04 billion) in the Union Budget 2026–27 and continued investment in roads, railways, housing, and urban infrastructure, cement demand is expected to remain robust across key end-use sectors.
Eastern and central India are expected to emerge as major growth markets for cement producers, driven by improving infrastructure connectivity, industrial development, and rising housing activity in historically underpenetrated regions. At the same time, India is expected to strengthen its position as a regional exporter of clinker and cement, supported by port-based grinding and integrated plants along the western and eastern coasts. Continued consolidation, capacity expansion, and increasing investments in green power and logistics efficiency are expected to enhance industry competitiveness over the coming years.
References: Media Reports, Press releases, Union Budget 2026-27, Edelweiss Securities Ltd., Global Cement
FAQs
The cement industry in India manufactures cement for housing, commercial construction, and infrastructure projects. As the world's second-largest cement producer, it plays a vital role in supporting economic growth, urbanisation, and large-scale infrastructure development.
The Indian cement industry manufactures a wide range of products, including Ordinary Portland Cement (OPC), Portland Pozzolana Cement (PPC), Portland Slag Cement (PSC), white cement, and blended cement to meet diverse construction requirements.
The cement industry in India is expanding due to rising housing demand, rapid urbanisation, infrastructure spending, capacity expansion, and government initiatives such as PMAY and PM Gati Shakti, which continue to boost cement consumption.
India's cement sector has major manufacturing hubs in Andhra Pradesh, Rajasthan, Tamil Nadu, and Karnataka due to their abundant limestone reserves. These states account for a significant share of the country's installed cement manufacturing capacity.
The cement manufacturing industry primarily uses limestone as its core raw material, supported by coal and other mineral resources during production. India's abundant limestone reserves provide long-term raw material security for future capacity expansion.
The Indian cement industry supplies essential construction material for highways, metro rail, industrial corridors, housing projects, and high-speed rail networks. Growing public infrastructure investment continues to strengthen cement demand across the country.
The Government is supporting the cement industry in India through PMAY, PM Gati Shakti, the National Infrastructure Pipeline, and higher capital expenditure on roads, housing, and infrastructure, creating sustained demand for cement across multiple sectors.
The cement manufacturing industry is increasingly adopting renewable energy, waste heat recovery systems, green logistics, alternative fuels, and energy-efficient production to reduce emissions and improve long-term sustainability.
The cement industry in India is expected to witness sustained growth, supported by infrastructure development, housing demand, capacity expansion, and investments in green manufacturing. Rising domestic consumption and exports will further strengthen the sector's long-term outlook.
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