India’s Cement Industry Projected to Hit 5 Billion Tonnes by FY29 Amid Govt's Infra Push

The Indian cement industry which plays a significant role in the country’s construction and real estate sectors, is projected to grow at a CAGR of 4.9 per cent from 2024 to 2029, reaching 5.09 billion tonnes by 2028-29 , according to a report published by Infomerics Ratings. In FY23, the number was only 3.82 billion tonnes.

The agency attributed this growth to the government’s spending (Rs 11.11 lakh crore in FY25) on infrastructure projects. The cement industry contributes approximately 11 per cent of the input cost to the construction sector in India which is the world’s second-largest cement producer after China.

As per the Economic Survey of India 2023-24, India's current annual installed capacity of the cement industry is 622 million tonnes, with cement production of around 427 million tonnes in FY24.

The report stated that about 85 per cent of the cement industry is concentrated in Rajasthan, Andhra Pradesh, Telangana, Karnataka, Madhya Pradesh, Gujarat, Tamil Nadu, Maharashtra, Uttar Pradesh, Chhattisgarh and West Bengal.

Currently, India accounts for more than 8 per cent of global installed cement capacity, with more than 98 per cent of this capacity owned by private entities, while the remaining share is held by the public sector.

Read More | Ambuja Cements Q2 Profit at Rs 473 Crore

"India's cement industry has adequate capacity to meet the domestic cement demand, with the quantity of cement imported in the year FY23 is about 0.2 per cent of total domestic cement production. In FY23, India exported only a negligible quantity of clinker," the report mentioned.

Demand and Supply Outlook

The report said intense heatwave and general elections slowed down the pace of construction activities in April and May this year which resulted in a lower demand for cement in India. Barring a few major companies, other cement manufacturers are likely to have reported lower volumes during the June 2024 quarter.

The core industries witnessed a growth of 2 per cent in September 2-24 as compared to the same month last year, riding on the growth in the production of cement, refinery products, coal, fertilisers, and steel.

Read More | UltraTech Cement’s Shares Dip 2% After Profits Drop 36% in Second Quarter

In September, the cement production increased by 7.1 per cent and the cumulative index surged by 1.6 per cent during April to September 2024-25 over the corresponding period of the previous year, the data shows.

India has a total of 341 cement manufacturing units, comprising 159 integrated large cement plants, 120 grinding units, and 62 mini cement plants.