India’s cement sector is set to expand at 6-7% in the year 2026, driven by higher demand from housing and infrastructure initiatives, as per a report released by ICRA (a credit rating agency). This follows a 6.3% hike in cement consumption in the year 2025.

Although the global economy is in doubt, India is likely to contribute significantly to new cement production capacity—around 43-45 million tonnes in 2026 against 32-35 million tonnes in 2025. ICRA opines the future of the Indian cement industry is stable.

During the first half of 2025, consumption of cement increased only by 1.7% to about 212 million tonnes. The reason for this sluggish growth was largely due to the national elections and incessant rains. However, during the second half of the year, things improved significantly, and cement consumption escalated by 10.7% to about 241 million tonnes.

The majority of the new factories will be constructed in eastern and northern India, with around 22-24 million tonnes of new capacity. The southern region already has excess supply, but firms are still expanding there to maintain their position in the market.

Prices of cement, which had reduced by 10% previously, began to rise again from the third quarter of the year. Further, fuel such as coal and pet-coke became cheaper, which cut into the profits of cement businesses.