21/04/2026
The Indian cement industry remains a cornerstone of the nation’s economic framework, playing a pivotal role in the construction and real estate sectors while maintaining strong linkages with allied industries. As the world’s second-largest cement producer, India accounts for more than 8% of global installed capacity. Of this, a dominant 98% lies in the private sector, with the remaining 2% under public sector enterprises. The top 20 cement companies contribute nearly 70% of the country’s total production, underscoring a highly concentrated market structure.
Despite pandemic-related disruptions, domestic cement demand registered a healthy compound annual growth rate (CAGR) of approximately 7% between Fiscal 2020 and 2025, driven largely by the government’s sustained focus on infrastructure expansion and affordable housing initiatives. As of May 2025, India’s installed cement capacity stands at around 655 million tonnes per annum (MTPA). The southern region—comprising Tamil Nadu, Andhra Pradesh, Karnataka, Telangana, and Kerala—commands the largest share, accounting for 31% or 208 MTPA of total capacity. This is followed by East India at 20% (135 MTPA), North India at 19% (127 MTPA), Central India at 14% (91 MTPA), West India at 13% (89 MTPA), and the North-East at 3% (18 MTPA).
Over the next five years (FY26–30), the housing sector’s share is projected to contract marginally—from about 37-39% in FY21 to 32-34%—while infrastructure’s share is expected to expand from 25-27% in FY21 to 31-33% in FY30. This shift is underpinned by the Central government’s increasing investments in roads, railways, urban infrastructure, and irrigation. Notably, infrastructure spending as a percentage of GDP is projected to rise from 5.3% in FY24 to 6.5% by FY29, providing a strong stimulus to cement demand.
According to CRISIL Intelligence, cement demand is set for a revival in FY26, with projected year-on-year growth of 6.5-7.5% after a moderation in the preceding fiscal. Within the infrastructure segment, a 10% increase in capital expenditure for core ministries—including Railways, Road Transport and Highways, Rural Development, Housing and Urban Affairs, Ports, Shipping and Waterways, and Civil Aviation—in the FY26 Budget Estimates (BE) over the FY25 Revised Estimates (RE) is expected to support steady growth of 6-7% in FY26. The industry is anticipated to add 245-255 MTPA of grinding capacity between FY26 and FY30, bringing total installed capacity to an estimated 915-925 MTPA by FY30.
Over the long term, from FY26 to FY30, cement demand is projected to grow at a CAGR of 7.5-8.5%, slightly outpacing the ~7% CAGR of the previous five years. This acceleration will be driven by infrastructure investments and steady contributions from housing and I&C segments.
The industry is also witnessing a marked shift towards blended cement, with Portland Pozzolana Cement (PPC) holding the highest share. By incorporating additives such as fly ash or slag in place of natural limestone with Ordinary Portland Cement (OPC), producers can reduce power, fuel, and raw material costs while lowering carbon intensity.
Furthermore, the adoption of Artificial Intelligence (AI) is transforming operations. AI-powered systems analyze real-time production data to optimize raw mix proportions, fuel use, and grinding processes, enhancing efficiency and minimizing resource consumption. Predictive maintenance powered by AI is also enabling early detection of potential failures in critical equipment such as kilns, crushers, and mills—reducing downtime, extending equipment life, and improving operational reliability.
With a robust capacity pipeline, government-led infrastructure spending, and technological advancements driving efficiency, the Indian cement industry is set to consolidate its position as a key growth engine for the economy in the years ahead.