India’s cement industry is preparing for one of its biggest growth phases in recent years, with an estimated 160–170 million tonnes (MT) of additional grinding capacity expected to come online between FY26 and FY28, according to a detailed analysis by Crisil. This marks a sharp jump from the 95 MT expansion seen over the last three fiscal years, reflecting rising confidence in the country’s sustained infrastructure and housing boom.
The sector’s aggressive expansion is being driven by strong demand from two key engines of growth — the government’s large-scale infrastructure push and a steady revival in housing construction across urban and rural markets. As a result, the industry’s capacity utilisation is projected to stabilise at around 70%, even as new facilities become operational.
To support this expansion, the cement industry is expected to invest nearly ₹1.2 lakh crore in capital expenditure — about 50% higher than the capex seen in previous years. Notably, the risks associated with this investment cycle remain low. Crisil notes that nearly 65% of the planned projects are brownfield, which are faster to execute, more cost-efficient, and carry lower operational risks. Moreover, the industry’s healthy cash flow position is expected to fund a substantial part of the expansion without over-leveraging balance sheets.
Another important trend highlighted in the report is the shift toward split grinding units, which are quicker to build and operationalise. These units are projected to contribute nearly two-thirds of the upcoming capacity, enabling faster supply alignment with regional demand.
With strong demand drivers, robust financials, and a strategic expansion mix, India’s cement sector is poised for accelerated growth over the next three years.
* cement industry India, Crisil report cement, capacity expansion FY26, Indian infrastructure demand, cement capex news
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