The Bedrock of Development: India’s Cement Industry

Cement powers India’s growth story - quite literally.

With rapid urbanisation, record infrastructure spending, and a recent GST cut aimed at lowering costs, the industry plays a key role in driving India’s development.

Infrastructure capex has surged sixfold, from about ₹2 lakh crore in FY15 to ₹11.21 lakh crore in FY26, underscoring how cement demand moves hand in hand with India’s growth ambitions.

India is the world’s second-largest producer and consumer of cement, contributing more than 8% of global capacity.

Cement is central to the country’s infrastructure and housing growth, making it one of the most critical industries driving development.

The numbers say it all.

Installed capacity stood at around 550 million tonnes per annum (MTPA) in FY25, second only after China’s 2.29 billion metric tons.

The domestic market, valued at 3.96 billion tonnes in FY23, is projected to reach 5.99 billion tonnes by 2032, expanding at a steady 4.7% CAGR.

This growth is not only about meeting local demand but also about supporting India’s ambitions of becoming a global manufacturing and infrastructure hub.

The steady rise in cement consumption reflects the country’s ongoing transformation - more homes, more cities, and more mega projects.

Foreign investors also see cement as a long-term story.

Since 2000, the industry has attracted ₹51,130 crore (US$6 billion) in FDI.

For global investors, India offers two big advantages: a large and growing consumer base, and abundant raw materials that make production sustainable and cost-efficient.

At the heart of the industry’s strength is India’s limestone reserve base.

Limestone is the core ingredient for cement, which makes up nearly 80-90% of the raw materials used in producing clinker.

India has it in abundance, spread across several states, ensuring a steady and reliable supply.

Cement manufacturing alone accounts for around 95% of the country’s total limestone use, reflecting how demand for this key mineral continues to rise.

Because most of it is locally sourced, producers enjoy a clear cost advantage and minimal dependence on imports The market itself is dominated by a few large companies.

UltraTech Cement is the clear leader with 183.4 MTPA capacity, accounting for 26.2% of the total market share.

The Adani Group, through its cement arms ACC, Ambuja, Orient, and Penna, has built up 100 MTPA, making it the second-largest player.

Shree Cement and Dalmia Bharat add to the strength of the top four, which together control 56% of India’s total cement capacity.

Their scale and financial strength allow them to shape pricing, manage supply, and invest in new projects.

On the stock markets, too, these companies hold significant weight.

UltraTech Cement commands a market capitalisation of ₹3.56 lakh crore, followed by Ambuja Cements at ₹1.24 lakh crore and Shree Cement at ₹1.04 lakh crore, making cement one of the most closely watched sectors by investors.

Cement demand is tightly linked with India’s infrastructure push. The Union Budget 2025-26 earmarked ₹2.87 lakh crore for roads and highways, a direct driver of cement consumption.

Large-scale projects are cement-intensive.

The Mumbai-Ahmedabad Bullet Train project, for instance, consumes 20,000 cubic metres of cement every day and provides jobs for 20,000 workers.

In Karnataka, new cement-linked projects worth ₹17,183 crore have been cleared, expected to create 12,500 jobs.

Urbanisation is another strong driver.

By 2030, more than 40% of Indians will live in cities, increasing demand for affordable housing, commercial spaces, metro networks, and smart cities.

Each of these requires massive cement consumption.

Policy has played a decisive role in shaping future demand.

Cement was long taxed at the highest GST slab of 28%, making it one of the costliest inputs for builders and contractors.

The government’s decision in September 2025 to reduce the GST on cement to 18% has been a turning point.

The move lowers construction costs, improves housing affordability, and supports rural as well as urban demand.

Affordable housing projects, in particular, are expected to gain momentum in FY26 as a result of this tax relief.

India’s cement industry is not just another sector.

It is a foundation industry - one that underpins housing, infrastructure, and industrial growth.

As cities expand and infrastructure projects multiply, cement will remain the bedrock of India’s growth story, providing the base on which the future is built.