Introduction: Cement as a Nation-Building Material
India’s cement industry has transitioned from being a domestically driven sector into a globally relevant engine of infrastructure, housing, and industrial development, evolving in sync with the country’s economic transformation and policy architecture. As the second-largest producer and consumer of cement in the world, India’s demand is not merely a function of urban expansion—it is fundamentally tied to national goals such as affordable housing, multimodal logistics, and the creation of sustainable cities, all supported by large-scale schemes like PM GatiShakti, Pradhan Mantri Awas Yojana (PMAY), Smart Cities Mission, and the National Infrastructure Pipeline (NIP). The sector’s role is not ancillary; it is foundational to India’s aspiration of becoming a $5 trillion economy by 2027.
Historical Performance: FY12–FY24 Cement Consumption Trends
Over the past 12 years, India’s cement consumption has grown from 241 million tonnes in FY12 to over 415 million tonnes in FY24, reflecting a compound annual growth rate (CAGR) of 4.7%, despite periods of disruption such as the global slowdown and COVID-19.
Key Policy Catalysts During This Period:
- Pradhan Mantri Gram Sadak Yojana (PMGSY): Boosted rural cement demand through road connectivity.
- Housing for All by 2022 (PMAY-G & PMAY-U): Directly incentivised housing-linked cement consumption.
- Rural Infrastructure Development Fund (RIDF): Enhanced warehousing, roads, and irrigation—all cement-intensive.
| Year | Cement Consumption (mio t) | YoY Growth | Key Policy/Driver |
| FY12 | 241 | 9% | PMGSY, JNNURM |
| FY14 | 262 | 3% | NHDP Phase-IV |
| FY17 | 296 | 3% | Smart Cities Launch |
| FY19 | 353 | 12% | PMAY, AMRUT |
| FY21 | 314 | -10% | COVID-19 |
| FY24 | 415 | 9% | NIP, CAPEX push |
Capacity and Industry Structure in FY24
India’s installed cement production capacity stands at approximately 636 million tonnes per annum, though the effective operating capacity is closer to 558 million tonnes, factoring in kiln downtime, logistics constraints, and seasonal variations. This positions India with a strategic demand–supply cushion, enabling flexibility for regional project execution and exports.
Government Incentives for Industrial Capacity Expansion:
- PLI Scheme for Cement Equipment Manufacturing (proposed): To indigenize advanced kiln and blending technologies.
- National Logistics Policy (NLP): Enhancing rail-cement corridors for improved bulk movement.
- PM GatiShakti Digital Platform: Helps align cement plant siting with multimodal transport planning.
Market Composition and Dominance: A Moderate Oligopoly
The cement industry operates under a moderately consolidated market structure, where top 10 players command over 70% of the market share, yet a long tail of regional players provides flexibility and decentralisation—critical for India’s federal infrastructure needs.
| Company | Estimated Market Share (FY24) |
| UltraTech | 22% |
| Adani Group | 12% |
| Shree Cement | 8% |
| Dalmia, Ramco | 7–8% each |
| Others (50+) | ~30% |
Product Mix and Sustainability Transition
India’s cement production is predominantly blended, with Portland Pozzolana Cement (PPC) forming 60–65% of output, driven by its compatibility with fly ash and slag, both of which are aligned with the Government’s circular economy framework and fly ash utilisation mandates (MoEFCC Notifications).
Sustainability Linked Initiatives:
- Perform Achieve Trade (PAT) Scheme – Cement Sector (BEE): Targets energy intensity reduction.
- Waste Heat Recovery Systems (WHRS): Supported via concessional financing and green tax incentives.
- Low Carbon Cement R&D under National Green Hydrogen Mission (MoPNG + MNRE): Encouraging development of geopolymer and LC3 blends.
Infrastructure Pipeline and Cement Demand: A Direct Correlation
India’s infrastructure development momentum has been reinforced by multi-ministry convergence platforms like PM GatiShakti and execution roadmaps like the National Infrastructure Pipeline, with an envisaged outlay of ₹111 lakh crore by FY25, wherein roads, railways, housing, and urban infrastructure account for over 70% of cement-linked demand.
Major Cement-Consuming Flagship Projects:
- Bharatmala Phase-II (Highways, border roads, cement-grade RCC)
- Vande Bharat Rail Infrastructure (RDSO): Platform and terminal development
- Industrial Corridors (DMIC, VCIC, AKIC): Greenfield cement demand in node cities
- Urban Metro Projects (e.g., Pune, Bhopal, Surat): High-grade cement (OPC 53) for elevated structures
Forecast: FY25–FY30 Cement Demand Outlook
India’s cement demand is projected to grow at a robust CAGR of 7–9% over the next six years, largely anchored in housing (~60% of demand), infrastructure (~25%), and commercial/industrial sectors (~15%).
| Segment | Share in Total Demand | Forecast CAGR (FY25–30) | Key Schemes Driving Demand |
| Housing | 60% | 7–9% | PMAY, ARHC, CLSS |
| Infrastructure | 25% | 8–10% | NIP, GatiShakti, AMRUT 2.0 |
| Commercial/Industrial | 15% | 8% | Make in India, PLI, Freight Parks |
By FY30, India’s cement consumption could cross 725–750 million tonnes, necessitating an installed capacity of over 800 million tonnes, especially as the country expands its rail, road, warehousing, and defence infrastructure footprint.
Integrated Cement Demand Forecast – Methodological Scenario Analysis (FY24–FY29)
Source: HOLTEC Analysis
| Forecast Parameter | Correlation with GDP | Population-Based | Time-Based Regression | Market Feedback | End Use Analysis | Weighted Total |
| Weightage Assigned (%) | 30% | 5% | 5% | 30% | 30% | 100% |
| FY29 Demand (Most Likely, Mio t) | 621 | 470 | 486 | 639 | 610 | 608 |
| Uncertainty (± Mio t) | 48 | 60 | 44 | 30 | 29 | 37 |
| CAGR – Low Scenario (%) | 8.0 | 2.0 | 2.0 | 8.0 | 7.0 | 7.1 |
| CAGR – Most Likely (%) | 8.4 | 2.5 | 3.2 | 9.0 | 8.0 | 7.9 (~8%) |
| CAGR – High Scenario (%) | 10.0 | 5.0 | 5.0 | 10.0 | 9.0 | 9.2 |
Table: Projected National Cement Demand – Most Likely Scenario (FY24–FY29)
Source: HOLTEC Analysis
| Fiscal Year | Demand (Mio t) | YoY Growth (%) |
| FY24 | 415 | 9.7 |
| FY25 | 434 | 4.5 |
| FY26 | 472 | 8.8 |
| FY27 | 514 | 8.8 |
| FY28 | 559 | 8.8 |
| FY29 | 608 | 8.8 |
| CAGR (FY24–FY29) | ~8.0% |
Table: Estimated Cement Production Capacity – National Outlook
Source: Market Data & HOLTEC Analysis
| Fiscal Year | Capacity Additions (Mio t) | Total Installed Capacity (Mio t) |
| FY24 | 40.3 | 643 |
| FY25 | 50.9 | 694 |
| FY26 | 68.3 | 762 |
| FY27 | 40.5 | 802 |
| FY28 | 2.5 | 805 |
| FY29 | – | 805 |
Table: Estimated Effective Cement Capacity (at ~90% Utilization)
Source: HOLTEC Technical Analysis
| Fiscal Year | Effective Capacity (Mio t) |
| FY24 | 561 |
| FY25 | 602 |
| FY26 | 656 |
| FY27 | 705 |
| FY28 | 724 |
| FY29 | 724 |
Table: Cement Demand–Supply Gap Analysis (Domestic Supply Net of Exports)
Source: HOLTEC Analysis | Unit: Million Tonnes (Mio t)
| Year | Effective Capacity | Estimated Exports | Domestic Supply | Domestic Demand | Surplus / Deficit |
| FY24 | 561 | 6 | 555 | 415 | +140 |
| FY25 | 602 | 6 | 596 | 434 | +162 |
| FY26 | 656 | 6 | 650 | 472 | +178 |
| FY27 | 705 | 6 | 699 | 514 | +185 |
| FY28 | 724 | 6 | 718 | 559 | +159 |
| FY29 | 724 | 6 | 718 | 608 | +110 |
Key Takeaways and Strategic Implications
- Most Likely CAGR for cement demand is ~8%, indicating a robust infrastructure and housing-led growth.
- A consistent surplus supply buffer (110–185 mio t) is expected, providing operational flexibility and margin resilience.
- The sector must align new capacity with regional demand distribution and logistics optimization under PM GatiShakti to avoid inefficiencies.
- Surpluses in early years may result in lower utilization rates, unless exports or logistics-integrated strategies are accelerated.
Key Challenges and Strategic Imperatives
| Challenge | Strategic Response |
| Rising Energy Costs | Shift to WHRS, solar captive plants (MNRE-linked subsidies) |
| Regional Overcapacity (South vs East) | Logistics rationalisation under NLP |
| Carbon Emissions (0.7–0.9 tCO₂ per tonne) | MoEFCC green rating compliance, green cement transitions |
| Transport bottlenecks | 20+ Cement Logistics Terminals approved under PM GatiShakti |
Conclusion: Cement as a Strategic Asset in Nation Building
India’s cement sector is no longer a passive supplier—it is a strategic enabler of policy-driven infrastructure transformation. As we transition into an era of green industrial growth, circular economy compliance, and digital planning (via GIS mapping under GatiShakti), the cement industry must embrace technology, sustainability, and decentralisation simultaneously. The synergy between policy (NIP, GatiShakti, Smart Cities), fiscal stimuli (Budget Capex Push), and private investment (FDI in cement parks) will shape the trajectory of India’s cement demand, capacity planning, and long-term resilience.
Reference Links & Official Sources
| Topic | Reference | Link |
| Cement Sector Overview | Ministry of Commerce & Industry, GoI – Annual Report | https://commerce.gov.in/publications/annual-report |
| Infrastructure Demand & Cement Forecast | NITI Aayog – India @100 Infrastructure Vision | https://niti.gov.in/planning |
| Cement Capacity, Demand, and Production | Department for Promotion of Industry and Internal Trade (DPIIT) | https://dpiit.gov.in/ |
| Cement Statistics | Cement Manufacturers’ Association (CMA India) | https://www.cmaindia.org/ |
| Power, Housing, Infrastructure Projections (Demand Drivers) | Ministry of Housing & Urban Affairs – Smart Cities Mission, PMAY | https://mohua.gov.in/ |
| Project-Specific Environmental Reports (incl. TEFR, EIA, etc.) | Environment Clearance Portal, MoEFCC | https://environmentclearance.nic.in/ |
| Industrial Policy Inputs | Invest India – Sectoral Reports | https://www.investindia.gov.in/sector/construction |
| Cement Forecasting Models & Methodology | ResearchGate – Cement Industry Forecast Models (search keywords like “cement demand India CAGR forecast”) | https://www.researchgate.net/ |
| HOLTEC Consulting (for industry reports and TEFR examples) | HOLTEC Consulting Pvt. Ltd. – Official Site | https://www.holtecnet.com/, HOLTEC Technical Feasibility Report, 2024, https://holtecnet.com/holtecdocs/TechnicalPapers/p_2023_2.pdf , https://holtecnet.com/holtecdocs/TechnicalPapers/p_2019_4.pdf |
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