Indian Cement Industry Analysis

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 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.

*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.

*Shree Cement announces Rs 7,000 crore (US$ 844 million) investment for 12 million tonnes capacity expansion in India.

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Last updated: Oct, 2025

Cement Industry Report

Aug, 2025

India is the second-largest cement producer in the world, accounting for over 8% of global installed capacity. Around 98% of capacity lies with the private sector, while the top 20 companies account for 70% of total production. Abundant limestone deposits across the country provide strong growth potential.

In FY25, India’s cement production rose 6.3% YoY to 453 million tonnes, up from 426.29 million tonnes in FY24. Output in April-July FY26 grew 8.9% YoY, with July 2025 alone registering 11.7% growth. The sector expanded 9% YoY in May 2025, reaching 39.6 million tonnes, with private majors like UltraTech and Adani boosting volumes. Prices rose 8% YoY, with Southern India seeing a Rs. 10 (US$ 0.11) per bag increase in August despite the monsoon.

Policy reforms are also shaping the sector. 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 stimulating demand. Cement freight at ports rose to 2.98 MMT in April-July 2025, compared to 2.22 MMT a year earlier. The Northeast Frontier Railway reported a 71% YoY surge in cement freight during the same period, driven by infrastructure expansion in the region.

Consumption stood at 445 MMT in FY24 and is expected to reach 450.78 MMT by FY27 and 670 MMT by 2030. ICRA projects demand to grow 4-5% in FY25 and 6-7% in FY26, supported by infrastructure and housing demand. Government housing schemes like PMAY, combined with a 10% increase in central infrastructure spending and 11% higher allocations in state budgets, are sustaining momentum. Rural housing now accounts for 32-34% of demand, while urban housing is rebounding with PMAY-Urban support.

Exports of panel cement, clinkers, and asbestos products stood at Rs. 5,845 crore (US$ 685.1 million) in FY25, while imports were Rs. 1,543 crore (US$ 181.2 million). India is well placed to become a key exporter of clinker and grey cement to the Middle East, Africa, and other developing regions, with coastal plants like Gujarat and Visakhapatnam offering logistical advantages.

FDI inflows in cement and gypsum products reached Rs. 51,135 crore (US$ 7.9 billion) between April 2000 and June 2025. Consolidation is accelerating, with the top 10 players acquiring 140 MT over the last five years, worth Rs. 89,000 crore (US$ 10.4 billion). UltraTech and Adani-led Ambuja have been the most aggressive, especially in South India.

The government’s infrastructure pipeline is a major catalyst. Projects like the Mumbai-Ahmedabad Bullet Train corridor, consuming 20,000 cubic meters of cement daily, are boosting demand and creating employment. Affordable housing in Tier-II and Tier-III cities is also expanding rapidly, driven by policy incentives and urban migration.

Sustainability is a growing focus. In May 2025, the Department of Science and Technology launched five CCU testbeds with JK Cement, JSW Cement, Dalmia, and UltraTech to capture CO2 and convert it into value-added products. HeidelbergCement India has scaled green power to 40-90% at key plants and is investing in solar and hybrid PPAs. Ambuja and ACC, under Adani, added 299 MW of renewable energy in FY25 and are targeting 1,000 MW by FY26, while UltraTech meets 46% of its energy needs through green sources and targets 85% by 2030.

Company expansions remain aggressive. UltraTech commissioned 17.4 MTPA of new capacity in FY25, acquired Kesoram’s cement business, and is pushing towards 200 MTPA by 2027 with Rs. 32,400 crore (US$ 3.9 billion) earmarked for capex. Ambuja crossed 100 MTPA in FY25 and targets 140 MTPA by FY28, aided by the Penna Cement acquisition and integration of Orient Cement. ACC, also under Adani, crossed the 100 MTPA milestone in April 2025. JSW Cement plans to triple capacity to 60 MTPA through organic growth and acquisitions, supported by a Rs. 3,600 crore (US$ 408 million) IPO. Dalmia Bharat is expanding towards 75 MTPA by FY28, while Shree Cement is targeting over 80 MTPA by 2028 with major projects in Rajasthan, Uttar Pradesh, and Karnataka. Ramco Cements plans to scale capacity to 30 MTPA by 2026, backed by Rs. 1,403 crore (US$ 168 million) of ongoing expansion.

Looking ahead, India’s cement industry is projected to grow at a CAGR of 5.1% from 2025 to 2030, reaching an installed capacity of 850 MTPA by 2030 and 1,350 MTPA by FY50. Demand growth of 7-8% CAGR until FY26, supported by housing, infrastructure, and industrial projects, will sustain India’s position as the world’s second-largest cement producer and a potential global exporter.

India’s cement industry is on a robust growth trajectory, underpinned by expanding infrastructure, housing demand, and strong private sector investments. With capacity expansions, technological advancements, and sustainability initiatives accelerating, the sector is well poised to achieve 850 MTPA capacity by 2030 and reinforce its global standing. As policy reforms, green innovations, and export opportunities align, India’s cement industry is set to play a pivotal role in building the nation’s infrastructure vision and driving sustainable growth in the decades ahead.