India's economy for the decade ending 2023-24, grew at an average rate of 6%. Decadal growth was fuelled by pandemic recovery and progressive economic reforms. This momentum is likely to continue in the future, driven by favourable demographic, stable governance, robust urban and rural demand, technological advancement and significant government spend on infrastructure. All these initiatives led to a symbiotic relationship between economic prosperity and cement industry’s growth with GDP growth projected at 6.5% for FY 2024-25.

Driven by sustained demand from the housing and infrastructure sectors, cement volumes are expected to grow by 4-5% annually, reaching 440-445 million metric tonnes (MT) in FY 2024-25. This growth is projected to continue, with an increase of 6-7% annually, reaching 475-480 million MT in FY 2025-26.²

The Indian cement industry is set for significant growth, with installed capacity expected to reach 850 million tonnes per annum (t/a) by 2030 and 1,350 million t/a by 2050.³ Strong economic fundamentals, including robust GDP growth, India’s transition to a middle-income nation and an expanding working-age population, will drive cement demand.

Additionally, income tax cuts and substantial capital expenditure plans are expected to boost housing and infrastructure development. The Cement Manufacturers’ Association (CMA) aims for a compound annual growth rate (CAGR) of over 6% in installed capacity, with capacity expansion and mergers and acquisitions anticipated as key industry trends.⁴

²ICRA, ³IBEF, ⁴CMA

Continued Expansion of the Indian Economy

The Indian economy, one of the world's largest- and fastest-growing, has shown remarkable resilience and dynamism in recent years. As we look ahead to FY 2026, the continued expansion of this vibrant economy is expected to further bolster its position on the global stage and the economy is projected to expand by 6.5%⁵. This growth is driven by a confluence of factors, including robust domestic demand, strategic government initiatives, technological advancements and a favourable global economic environment.

Infrastructure Push

The Union Budget for FY 2025-26 has allocated ` 11.21 lakhs crore for capital expenditure (CAPEX), marking a 10% increase from the revised estimate of ` 10.18 lakhs crore (USD 116.78 billion) for FY 2024-25. The Budget prioritises infrastructure investment to fuel economic growth, stimulate demand and enhance productivity across key sectors. It also encourages public-private partnerships (PPPs) to improve execution and increase private sector involvement in infrastructure development.⁶

Expanding Housing Sector

The desire for homeownership, particularly in the post-pandemic era, is driving the growth of India’s housing sector across both urban and rural areas. As the largest consumer of cement, the housing sector currently accounts for around 65% of the country’s cement demand. This expanding sector will continue to be a key driver of future demand, playing a vital role in the industry’s growth and shaping India’s infrastructure landscape.

Key Growth Drivers

Population Growth

With a population nearing 1.5 billion, India has become the world’s most populous country, generating consistent and significant demand for housing. A large portion of this population is within the working age group, further fuelling the growth of the real estate sector and its potential.

Urbanisation and Infrastructure Development

Rapid urbanisation, coupled with government initiatives such as the Smart Cities Mission, PMAY and AMRUT, is driving demand for residential, commercial and infrastructure projects, thereby boosting cement consumption.

Rural Development Investments

Government-backed projects focusing on rural roads, schools, healthcare, and sanitation have spurred cement demand in rural areas, opening up new market opportunities.

Technological Advancements and Innovation

Adoption of advanced manufacturing technologies is improving efficiency, lowering costs and enhancing product quality. Innovations like green cement, ready-mix concrete and specialty cements cater to evolving construction needs and promote sustainability.

Industry Consolidation

Mergers and acquisitions, with approximately 200 million tonnes of capacity consolidated over the past decade, have resulted in more efficient operations, optimised production, and economies of scale.

Environmental Sustainability

With increasing environmental regulations, cement manufacturers are adopting cleaner, more sustainable practices, reducing carbon footprints while boosting their competitiveness in the market.