India is the second-largest cement producer in the world and accounts for over 8% of the global installed capacity. Of the total capacity, 98% lies with the private sector and the rest with the public sector. The top 20 companies account for around 70% of the total cement production in India. As India has a high quantity and quality of limestone deposits throughout the country, the cement industry promises huge potential for growth.
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 FY32, exhibiting a CAGR of 4.7% during FY24-FY32. 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.
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.
The Indian cement sector's capacity is expected to expand at a Compound Annual Growth Rate (CAGR) of 4-5% over the four-year period up to the end of FY27. It would thus begin the 2028 financial year at 715-725 MT/ year in installed capacity.
Cement consumption is expected to reach 450.78 million tonnes by the end of FY27.
At present, the installed capacity of cement in India is 600 MTPA with a production of 391 MTPA.
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.
The cement sector saw a modest growth of 2-3% in Q1 FY25, primarily due to a slowdown in construction during the Lok Sabha elections. However, ICRA projects a 7-8% growth for FY25, driven by strong demand in infrastructure and housing.
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.
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.
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.
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.
In October 2023, the real estate sector received the second-highest PE/VC investments at US$ 601 million across six deals.
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.
PE/VC investments in real estate and infrastructure witnessed a sharp growth of 27%, at US$ 13.7 billion in December 2022 as compared to US$ 10.7 billion in December 2021.
The Indian cement industry is expected to continue to grow rapidly and reach an installed capacity of 850 million t/a by 2030 and 1350 million t/a by FY50.
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.
JSW Group initiates IPO process for JSW Cement, aiming to raise Rs. 6,000 crore (~US$ 723 million), potentially the largest in the sector, with an array of bankers enlisted. Plans include diluting 10-15% stake, with further dilution over two years for capacity expansion to 60 MTPA.
Shree Cement announces US$ 844 million (Rs. 7,000 crore) investment for 12 million tonnes capacity expansion in India, including clinker manufacturing plants in Rajasthan and Karnataka, along with cement plants in Rajasthan, Uttar Pradesh, and Karnataka by March 2025.
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 June 2023, Shree Cement announced four planned capacity expansion projects that aim to increase its installed cement production capacity by 20% to 55.9 MT/year.
In June 2022, UltraTech Cement approved Rs. 12,886 crore (US$ 1.65 billion) capital expenditure to increase capacity by 22.6 Million Tonnes Per Annum (MTPA) through brownfield and greenfield projects.
UltraTech Cement announced a collaboration with UCLA's Institute for Carbon Management (ICM) to implement ZeroCAL technology, which aims to reduce nearly 98% of CO2 emissions from cement production; this partnership will establish a demonstration plant at UltraTech's integrated cement manufacturing unit.
India's cement production was expected to range between 380-390 million tonnes in FY23, a growth rate of 8-9% Year-on-Year (YoY).
Cement production increased by 1.9% in June 2024 over June 2023. Its cumulative index increased by 0.3% during April-June, 2024-25 over the corresponding period of the previous year.
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.
Adani Group will set up two new cement manufacturing plants, 15,000 MW of renewable power projects, and a data centre in Andhra Pradesh.
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 December 2023, UltraTech Cement concluded an agreement to acquire Kesoram Cement from Kesoram Industries for US$ 912 million.
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.
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.
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.
Dalmia Cement (Bharat) is planning to invest US$ 560 million following the signing of a memorandum of understanding (MoU) with the Assam government on the construction of a new cement plant in.
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 government approved an outlay of Rs. 1,99,107 crore (US$ 26.74 billion) for the Ministry of Road Transport and Highways, and this step is likely to boost the demand for cement.
Several government schemes such as MGNREGA, PM Garib Kalyan Rozgar Abhiyan and state-level schemes such as Matir Srisht (West Bengal) and public work schemes (Jharkhand) have aided demand.
On January 8, 2024, ACC Ltd, a subsidiary of Adani-owned Ambuja Cement, completed the acquisition of the remaining 55% stake in Asian Concretes and Cements Private Ltd. (ACCPL) for Rs. 425.96 crore (US$ 50 million), increasing ACC's total cement production capacity to 38.55 MTPA. This acquisition raises the Adani Group's overall cement capacity to 77.40 MTPA, with plans to expand to 106 MTPA by FY26.
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.
Growth in the Infrastructure and real estate sector, post-COVID-19 pandemic, is likely to augment the demand for cement in 2022. The industry is likely to add an ~8 MTPA capacity in cement production.
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.
As per DGCIS, India’s export of Portland cement, aluminous cement, slag cement, supersulphate cement and similar hydraulic cement stood at US$ 587.71 million (Rs. 4,894 crore) in FY24 while the imports were US$ 166.50 million (Rs. 1,386 crore).
The Government of India is strongly focused on infrastructure development to boost economic growth and is aiming for 100 smart cities. The Government also intends to expand the capacity of railways and the facilities for handling and storage to ease the transportation of cement and reduce transportation costs. These measures would lead to increased construction activity, thereby boosting cement demand.
The future outlook of the cement sector looks on track with the pandemic easing out.
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. The cement demand in India is estimated to touch 419.92 MT by FY27 driven by the expanding demand of different sectors, i.e., housing, commercial construction, and industrial construction.
