India’s GDP is estimated at 7.6% in FY 2025-26, supported by strong consumption and investment, reaffirming its position as the world’s fastest-growing major economy for the fourth consecutive year. Growth is expected to moderate slightly to around 6.9% in FY 2026-27, reflecting sustained economic momentum.
The Company expects India’s cement industry demand to grow by around 5% in FY 2026-27, supported by sustained demand from the housing and infrastructure sectors, following a 6.5–7.5% increase in FY 2025-26. Cement demand remained robust driven by strong construction activity, even as the evolving geopolitical situation in West Asia has introduced volatility in fuel and raw material markets. Furthermore, a reduction in GST on cement, coupled with the Government’s continued emphasis on infrastructure spending is expected to support demand momentum through FY 2026-27, despite elevated input costs arising from disruptions to global supply chains. Against this backdrop of healthy demand, leading cement companies are expanding capacities through both organic and inorganic routes to further strengthen their market positions while actively managing cost pressures from higher coal, petcoke and freight expenses, as well as the impact of a depreciating Rupee on imported inputs.
Per-capita cement consumption in India remains well below global averages, signalling significant headroom for growth as incomes rise and construction intensifies. With per-capita consumption roughly in the ~290 kg versus a global average near 540 kg, continued urbanisation, rising household formation and higher penetration of formal housing are expected to lift consumption per capita over the coming decade, even as the industry navigates near-term cost volatility.
Per Capita Cement
Consumption
Rapid urbanisation and rising housing demand continue to underpin growth in residential and commercial construction across India. As cities expand, the need for new housing stock and urban infrastructure intensifies, creating a durable structural tailwind for cement consumption. Government initiatives targeting affordable and middle-income housing have further stimulated demand in urban and peri-urban markets, while large-scale housing programmes have enabled predictable, long-tenure off-take for the sector. Beyond housing, increased investment in warehouses, logistics parks, data centres, manufacturing facilities and commercial real estate is diversifying demand drivers and supporting higher cement capacity utilisation. Sustained rural consumption, supported by improving rural incomes, agricultural infrastructure and last-mile connectivity projects, provides an important counter-cyclical buffer to urban demand fluctuations.
At the same time, enhancements in rail, coastal shipping and port infrastructure are reducing freight costs and extending market reach. Improved multimodal logistics enable more competitive supply across regions and help optimise pricing dynamics. Unlike mature markets focused largely on maintenance, India's cement demand reflects an underbuilt economy, driven by structural factors such as urbanisation, income growth and public investment rather than cyclical trends.
India's per capita cement consumption remains significantly below global benchmarks, highlighting substantial headroom for growth as income levels rise and housing demand accelerates. Despite being the world's second-largest cement producer, India's per capita usage is around 45% below the global average and nearly 82% lower than China, underscoring the scale of untapped potential across regions.
Sustained GDP growth is expected to translate into higher cement consumption, supported by multiple structural demand drivers. These include large-scale infrastructure development across roads, railways and metro networks, increased rural housing under PMAY-G, expanding urban housing through PMAY-U and real estate activity and rising industrial and commercial capital expenditure. Together, these factors provide a strong medium- to long-term growth outlook for the cement sector.
Capital expenditure across highways, ports, industrial corridors, metro rail projects and regional development programmes continues to signal strong near-term construction activity. Enhanced budgetary allocations for infrastructure have accelerated project pipelines, directly stimulating cement demand across regions.
In parallel, long-term industrial cement consumption is being supported by the Production-Linked Incentive (PLI) scheme, Smart Cities initiatives, sustained FDI inflows and the China+1 strategy, which is driving manufacturing relocation to India. The $2.6 trillion National Infrastructure Pipeline (NIP), reinforced by a ₹130 billion capex allocation in FY 2025-26, provides strong visibility for infrastructure-led growth and underpins a durable demand outlook for the cement sector.
The operating environment during FY 2025-26 remained dynamic, with cost pressures arising from global energy markets, logistics constraints and currency movements. These pressures intensified towards the latter part of the year and are expected to continue in the near term. Accordingly, the Company has sharpened its focus on cost optimisation, operational efficiency and disciplined capital allocation.
Ambuja Cements views India’s infrastructure and housing opportunity as a longterm demand engine and is positioned to capitalise on it by enhancing its capacity utilisation, expanding its capacity in a phased manner, widening geographic reach and continuously improving operational performance, all while prioritising sustainability concerns across the business.
By integrating AI and advanced technologies across its operations and value chain, the Company is helping accelerate infrastructure delivery and enhance efficiency, reinforcing its role in enabling faster, future-ready economic growth.
Increase in Capacity Utilisation
The Company is pursuing a balanced growth strategy of greenfield and brownfield expansions to strengthen market presence across the country. Capacity additions are being phased to match project pipelines and regional demand, ensuring timely offtake and efficient capital deployment.
Enhancing Operational Efficiency
Ambuja Cements is actively working towards overcoming external cost pressures by improving fuel and freight economics, efficient logistics utilisation and plant yield through technology upgrades, modern kiln systems, vertical roller mills and wider adoption of Waste-Heat Recovery Systems. Captive power, rail sidings and freight optimisation programmes further support cost competitiveness and delivery reliability.
Prioritising Sustainability
Sustainable practices are integrated into production, product development and operational decisions from higher use of blended cements to large-scale renewable investments and WHRS deployment. The Company is committed to measurable emission reductions, energy efficiency and green product growth, aligning climate action with commercial outcomes.
