After a period of margin pressure and price softness through late 2025, India’s cement sector is showing clear signs of recovery entering 2026. Cement demand and pricing both improved in January 2026, supported by government capital expenditure and ongoing infrastructure activity even as the housing segment continued to show some weakness. Between April and December 2025, capital expenditure by central and state governments increased by approximately 15%, providing a sustained demand base for the sector. Industry analysts project cement demand to grow 6–7% in FY26, driven by steady infrastructure development, continued urban housing demand, and a rural recovery. For property developers, builders, and buyers tracking construction costs, this recovery trajectory has direct implications for project pricing and delivery timelines.
What Drove the Decline and What’s Turning It Around
Cement prices declined through October and November 2025 before stabilising and recovering from December onward, with several regions reporting both price stability and incremental increases in January 2026. The recovery is being driven by a combination of factors on both the demand and cost side. A GST revamp announced in September 2025 is expected to reduce cement prices by ₹30-35 per 50-kg bag, lowering overall construction costs and stimulating demand. Simultaneously, softer fuel prices and cost control measures adopted by manufacturers have reduced margin pressure , improving the financial position of producers who had struggled through the price-down cycle.
Infrastructure Is the Demand Engine
While housing demand recovery remains gradual, infrastructure spending is compensating effectively. A 10% hike in central infrastructure allocations and an 11% rise in state budgets have fuelled demand from roads, railways, urban development, and public amenity projects. Large-scale projects like the Mumbai-Ahmedabad Bullet Train corridor alone consume 20,000 cubic metres of cement daily illustrating the scale at which infrastructure is absorbing supply. Healthy order flows from infrastructure, affordable housing, and industrial construction segments have been cited as incremental triggers for dispatch growth across the sector.
What It Means for the Property and Construction Sector
For property developers, the stabilisation of cement prices after a prolonged softness period reduces input cost uncertainty. A factor that had been affecting project scheduling and launch decisions through mid-2025. Industry capacity now stands at approximately 655 million tonnes per annum , meaning supply is not a constraint.
For homebuyers, lower cement prices particularly following the GST revision, translate into modest but meaningful relief on construction costs, which typically filters through to under-construction project pricing over one to two quarters. Policy support for infrastructure spending is expected to underpin long-term demand prospects for cement and related building materials, keeping the construction sector’s input cost environment more predictable than it was in 2023-24.
