Cement industry in India

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

* The Indian cement industry projects an 8% increase in sales by CY25, fueled by government infrastructure investments, although it faces challenges such as reduced sales realization in CY24.

* UltraTech Cement projects a 7-8% growth in cement demand for FY25, driven by increased construction activities, leading to a rise in industry capacity utilization to 72% and the addition of 35-40 million tonnes of capacity, primarily in eastern and southern India.

Attractive
Opportunities

* 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.

Long-term
Potential

* Oligopoly market, where large players have partial pricing control.

* Low threat from substitutes.

* Indian cement companies are amongst 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.

Increasing
Investments

*FDI inflows in the industry, related to the manufacturing of cement and gypsum products, reached Rs. 51,074 crore (US$ 7.91 billion) between April 2000-September 2024.

* 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.

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Last updated: Apr, 2025

Cement Industry Report

Feb, 2025

Introduction

India is the second-largest producer of cement in the world. It accounts for more than 8% of the global installed capacity. India has a lot of potential for development in the infrastructure and construction sector and the cement sector is expected to largely benefit from it. Furthermore, on the back of rising rural housing demand, the consumption of cement in India has been growing consistently as it is one of the cheapest products to buy in terms of Rs./kg. Strong expansion of the industrial sector, which has fully recovered from the COVID-19 pandemic shock, is one of the main demand drivers for the cement industry. As a result, there is a strong potential for an increase in the long-term demand for the cement industry. Some of the recent initiatives, such as the development of 98 smart cities, are expected to significantly boost the sector.

Aided by suitable Government foreign policies, several foreign players such as Lafarge-Holcim, Heidelberg Cement, and Vicat have invested in the country in the recent past. A significant factor which aids the growth of this sector is the ready availability of raw materials for making cement, such as limestone and coal.

Market Size

In FY23, the market size of India’s cement industry reached 3.96 billion tonnes and is expected to touch 5.99 billion tonnes by 2032, exhibiting a CAGR of 4.7% during 2024-32. As India has a high quantity and quality of limestone deposits throughout the country, the cement industry promises huge potential for growth. India has a total of 210 large cement plants, of which 77 are in Andhra Pradesh, Rajasthan, and Tamil Nadu. Nearly 32% of India's cement production capacity is based in South India, 20% in North India, 13% in Central, 15% in West India, and the remaining 20% is based in East India. India's cement production reached 374.55 million tonnes in FY23, a growth rate of 6.83% YoY.

Indian port traffic for cement in the period of Apr-Nov’24 saw an increase at 4.82 million metric tonnes (MMT) as compared to the same period of the previous fiscal at 4.65 MMT.

The Indian cement industry projects an 8% increase in sales by CY25, fuelled by government infrastructure investments, although it faces challenges such as reduced sales realization in CY24.

India’s export of panel cement, clinkers, and asbestos cement products stood at Rs. 5,099 crore (US$ 587.71) million in FY24 while the imports were Rs. 1,442 crore (US$ 166.50 million) for the same period.

The Indian cement industry is projected to achieve an 8% growth in sales by CY2025, primarily fuelled by government infrastructure investments. However, the sector is also contending with challenges, such as reduced sales realization in CY24. Key players, including UltraTech and Adani, are strengthening their market positions through substantial acquisitions and expansions, with the goal of enhancing capacity and fostering growth.

The Indian cement industry is proceeding with expansion plans and capacity additions, despite dampened demand expected to persist through the first half of FY25. Cement giants foresee a modest 6-7% volume growth this fiscal year, even though the period has begun with a pricing downturn.

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. Despite a pricing downturn due to increased competition, average cement prices declined by around 1.5% in FY24.

As of April 2024, the installed capacity of cement in India is 553 MTPA with a production of 298 MTPA.

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.

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.

Cement consumption is expected to reach 450.78 million tonnes by the end of FY27.

Investments

In CY24, the cement sector in India witnessed a significant increase in mergers and acquisitions, with more than ten deals announced, representing the highest level of activity since CY14. The total value of these transactions surpassed US$ 3.5 billion, largely fuelled by major players such as UltraTech Cement and Adani-promoted Ambuja Cements, especially within the South Indian market.
According to Confederation of Real Estate Developers' Associations of India (CREDAI), the market size of the real estate sector in India is projected to reach Rs. 112 lakh crore (US$ 1.3 trillion) by FY34 and Rs. 449 lakh crore (US$ 5.17 trillion) by 2047. Currently, the Indian real estate market is valued at Rs. 24 lakh crore (US$ 300 billion).
The capacity at the Kalavatala Plant in Nandyal, Andhra Pradesh, has been increased from 1.5 million tonnes per annum (mtpa) to 2 mtpa. Similarly, the Valapady grinding unit in Salem, Tamil Nadu, has also seen its capacity rise from 1.6 mtpa to 2 mtpa.
UltraTech Cement has received approval to acquire approximately 8.69% stake in Star Cement for a total consideration of up to Rs. 851 crore (US$ 98 million). The board of UltraTech has agreed to purchase up to 3.70 crore shares, in addition to other applicable charges.
Dalmia Cement is set to establish a new cement plant in Madhya Pradesh with a production capacity of 4 million tonnes, involving an investment of Rs. 3,000 crore (US$ 345 million). This facility will be the first in the country to operate entirely on 100% renewable energy.
Shree Cement is planning to invest Rs. 800 crore (US$ 92.1 million) to set up a cement plant in North-East Bihar with an annual capacity of 2 million tonnes. The company signed an MoU with the Bihar government during the Bihar Business Connect 2024 summit.
Ambuja Cement Ltd (ACL) has announced an investment of approximately Rs. 1,600 crore (US$ 184.2 million) to establish a cement grinding unit in Warisaliganj, located in the Nawada district of Bihar.
Ramco Cements proposed a Rs. 1,403 crore (US$ 168 million) capacity expansion, including a Rs. 1,250 crore (US$ 149 million) investment to double the capacity at its Kalavatala plant in Andhra Pradesh and an additional Rs. 153 crore (US$ 18.34 million) for a 10 MW waste heat recovery system in Tamil Nadu; the expansion aims to increase clinker capacity to 6.3 mtpa and cement capacity to 3 mtpa, with the total installed capacity reaching 19 mtpa for clinker and 26 mtpa for cement by FY26.
Ambuja Cements aims to increase its production capacity from 100 million tonnes per annum (mtpa) to 140 mtpa by FY28, positioning itself aggressively in the competitive cement market.
Bihar Chief Minister Mr. Nitish Kumar laid the foundation for a Rs. 1,600 crore (US$ 191 million) cement grinding unit by Ambuja Concrete in Nawada. The 6 mtpa project will create 250 direct and 1,000 indirect jobs, with the first phase expected by December 2025.
UltraTech Cement will deploy 500 electric trucks and 1,000 LNG/CNG vehicles by June 2025, cutting transport-related carbon emissions by 680 tonnes annually. Currently, it operates over 390 CNG and 50 LNG trucks. UltraTech aims to increase its green energy usage to 85% by 2030 and expand its production capacity to 200 million tonnes.
Shree Cement plans to invest Rs. 2,000 crore (US$ 240 million) to expand its cement production capacity in Uttar Pradesh by nearly 7 million tonnes annually over the next 24 months. The expansion includes new 3.5 mtpa facilities in Etah and Prayagraj, initiated under an MoU with the state government.
Ramco Cements Ltd proposes a Rs. 1403 crore (US$ 168 million) investment to double capacity at its Kalavatala plant in Andhra Pradesh and set up a 10 MW waste heat recovery system at its Ramasamy Raja Nagar plant in Tamil Nadu, aiming for a total installed capacity of 19 mtpa for clinker and 26 mtpa for cement by FY26.
FDI inflows in the industry, related to the manufacturing of cement and gypsum products, reached Rs. 51,074 crore (US$ 7.91 billion) between April 2000-September 2024.
UltraTech Cement Limited pledged Rs. 1,000 crore (US$ 120.3 million), while Star Cement committed Rs. 650 crore (US$ 78.3 million) on the inaugural day, December 13, of the Bihar Business Connect-2023 Global Investors Summit at Gyan Bhawan, Patna. 15 prominent companies in general manufacturing also signed Memorandums of Understandings.
In 2023, infrastructure emerged as the top sector, attracting US$ 11.6 billion across 57 deals, marking a 29% year-on-year growth (compared to US$ 9 billion across 75 deals in 2022), representing the second-highest investment level ever in PE/VC.
Real estate followed closely as the second-largest sector in 2023, witnessing a record-high of US$ 8 billion across 55 deals, reflecting a 15% increase year-on-year (compared to US$ 6.9 billion across 95 deals in 2022), marking the highest-ever value of PE/VC investments in this sector.
In October 2023, the real estate sector received the second-highest PE/VC investments at US$ 601 million across six deals.
In December 2023, UltraTech Cement concluded an agreement to acquire Kesoram Cement from Kesoram Industries for US$ 912 million.
In November 2023, ACC received a renewed licence for its Rajasthan limestone mine, allowing it to increase its extraction of limestone there to 1.5 million tonnes per year.
In October 2023, UltraTech Cement announced planned new capital expenditure (CAPEX) investments worth US$ 1.56 billion to grow its production capacity, beginning in the 2026 financial year.
In October 2023, Dalmia Bharat announced a planned investment of US$ 10.9 million in a grinding unit expansion at its 1 million tonnes/year Banjari cement plant in Bihar.
In April 2023, the infrastructure and real estate asset class recorded US$ 3 billion in PE/VC investments, an 82% increase YoY and a 3% increase over March 2023.
An MoU was signed between Star Cement Limited and the Government of Assam for an investment worth Rs. 1,400 crore (US$ 170.9 million) for setting up a Cement Grinding unit in Guwahati and another Cement Grinding unit in Cachar and AEC Block and other construction manufacturing units in Guwahati.
Ramco Cements is planning to invest a total of US$ 91.3 million towards growing its capacity in FY24. Its planned investments consist of US$ 15.8 million in an expansion to its Haridaspur grinding plant in Odisha and US$ 75.5 million in the acquisition of land in Bommanalli, Karnataka, on which to establish a limestone mine.

Some of the major investments and developments in the Indian cement industry are as follows:

In June 2024, Ambuja Cement signed an agreement to acquire Penna Cement for Rs. 10,422 crore (US$ 1,24 billion), a move expected to boost Adani Group's production capacity to over 140 million tonnes per annum (mtpa) by 2028. This acquisition will add 14 mtpa of production capacity, providing Ambuja Cement with an additional 3 million tonnes of clinker and 4 million tonnes of cement capacity. The deal is anticipated to enhance Ambuja's market share in South India by 8-15% and provide entry into the Sri Lankan market, while also allowing for further inorganic growth opportunities.
In July 2023, Shree Cement Ltd announced the commencement of commercial production at its clinker grinding unit in the Purulia district of West Bengal which has an annual cement capacity of 3 MT.
In June 2023, JSW Cement entered an agreement for a Sustainability Linked Loan (SLL) with BNP Paribas, to secure approximately Rs. 414 crore (US$ 50 million). The capital raised through this agreement will be utilised by JSW Cement to support its capacity expansions, aligning with its long-term objective of achieving a cement-making capacity of 50 mtpa in India.
In May 2023, ACC launched Bagcrete, a hassle-free and user-friendly concrete solution for all types of construction demands, which is a pre-blended mixture of cement, sand, and aggregates.
In May 2023, Adani Group-owned ACC and Ambuja Cements launched a modern Cement and Concrete R&D facility at Kalamboli on the outskirts of Mumbai.
In May 2023, Dalmia Cement (Bharat) launched Dalmia Supreme cement, a Portland Pozzolana Cement (PPC), in the Eastern India market.
In April 2023, Dalmia Bharat's wholly-owned material subsidiary-Dalmia Cement (Bharat) commenced commercial production at its second cement line at its Bokaro, Jharkhand Cement Works 2 (JCW2).
In April 2023, UltraTech Cement commissioned an upgrade to its grinding plant at Patliputra in Bihar. The 2.2 million tonnes (MT) per year upgrade brings the total capacity of the unit to 4.7 MT per year.
Ambuja Cements' parent company-Adani Group has said that the cement producer aims to more than double its sales to US$ 8.5 billion in 2028. Ambuja Cements currently was expecting to record sales of US$ 3.61 billion in 2023.

Government Initiatives

In order to help private sector companies thrive in the industry, the Government has been approving their investment schemes. Some of the initiatives taken by the Government of late are as below:

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. Additionally, the budget allocated Rs. 11.2 lakh crore (US$ 129.04 billion) for Infrastructure sector. To promote increased private sector involvement, the government has put forward a range of proposed initiatives.
The National Infrastructure Pipeline (NIP) expanded to 9,305 projects from 7,400 projects.
Government schemes like the Pradhan Mantri Awas Yojana (PMAY) for affordable housing and PM Gati Shakti National Master Plan for infrastructure are driving cement demand. PM Gati Shakti's focus on transport networks and PMAY's expansion will further increase cement consumption in coming years.
In October 2021, Prime Minister, Mr. Narendra Modi, launched the ‘PM Gati Shakti - National Master Plan (NMP)’ for multimodal connectivity. Gati Shakti will bring synergy to create a world-class, seamless multimodal transport network in India. This will boost the demand for cement in the future.

Road Ahead

The Indian government is firmly focused on infrastructure development to spur economic growth and is striving for full infrastructure coverage to establish smart cities. The government plans to increase the capacity of railways and the facilities for handling and storage to enable the transfer of cement and cut out on transportation costs. These measures are expected to result in increased construction activity in the country, thereby boosting demand for cement.

The eastern states of India are likely to be the newer and untapped markets for cement companies and could contribute to their bottom line in future. In the next 10 years, India could become the main exporter of clinker and grey cement to the Middle East, Africa, and other developing nations of the world. Cement plants near the ports, for instance, the plants in Gujarat and Visakhapatnam, will have an added advantage for export and will logistically be well-armed to face stiff competition from cement plants in the interior of the country. India's cement production capacity is expected to reach 550 MT by FY25. Number of foreign players are also expected to enter the cement sector owing to the profit margins and steady demand.