Nov. 14, 2025 - India’s cement industry is preparing for one of the largest capacity expansion cycles in its history. According to industry assessments released in the second half of 2025, the country is expected to add 160–170 million tons of grinding capacity between FY2026 and FY2028—nearly double the expansion recorded over the previous three years. If demand growth remains on its current trajectory, India’s total installed cement capacity could approach 830 million tons by the end of FY2028.

The expansion wave is driven by consistently strong demand and rising utilization rates. Since FY2023, India’s cement sales have grown at an average annual rate of around 9.5%, supported by ongoing infrastructure projects and resilient housing construction. Industry-wide capacity utilization has climbed to roughly 70%, well above the decade average of about 65%. Analysts expect annual demand to rise by 30–40 million tons over the next three years—sufficient to absorb a large share of the new supply and keep utilization levels stable.

A defining feature of this cycle is the focus on faster and lower-risk projects. Around two-thirds of the planned additions are stand-alone grinding units located close to major consumption centers, which reduce logistics costs and can be operational within one to two years. In addition, roughly 65% of projects are brownfield expansions that require no new land acquisition and carry shorter construction timelines. By contrast, integrated clinker plants typically take three to four years to complete and involve higher capital intensity and longer payback periods.

Capital expenditure across the sector is estimated to reach 1.2 trillion rupees over the next three financial years—about 50% higher than in the preceding period. Despite the significant investment, most leading producers maintain strong cash flow and disciplined balance-sheet management, helping keep leverage at manageable levels.

Throughout late 2025, several major companies have announced new grinding lines, clinker expansions, or acquisitions aimed at strengthening their regional positions. These moves reflect broad confidence in long-term demand drivers and the continued push to secure market share in high-growth states.

At the same time, industry observers caution against potential risks. A rapid build-up of new supply could pressure regional prices if demand eases, while the fast rollout of grinding units may intensify local competition. Broader macroeconomic conditions—including interest rates, infrastructure spending, and urban housing momentum—will also play a key role in determining how smoothly the new capacity is absorbed.

Overall, India’s cement sector is entering a decisive phase of expansion. If economic conditions remain stable, the planned 160–170 million tons of new capacity could be largely in place by FY2028, setting the stage for the industry to return to a balanced supply-demand environment toward the end of the decade.