New Delhi, March 2026 – India’s two largest real estate industry bodies, CREDAI and NAREDCO, representing approximately 20,000 developers, have formally flagged concerns over rising construction costs stemming from the escalating West Asia conflict. The associations warned that if tensions continue, construction costs will increase and project timelines could face delays due to likely shortages of construction materials. NAREDCO Chairman Niranjan Hiranandani described the geopolitical tension as “unexpected, unbelievable, and something that has really affected the entire economy of the country,” noting that because India imports 75 to 80 per cent of its energy, any disruption to key canal routes immediately impacts the petroleum-based products used across the industry. Separately, JLL India’s Construction Cost Guide 2026 projects that construction costs are expected to rise 3–5 per cent across all asset classes this calendar year, driven by regulatory changes, skilled labour scarcity, and stricter environmental standards.
What’s Being Affected and Why
The production of essential building materials is already facing disruption, with tile manufacturers suggesting cost increases as petroleum prices climb the entire tile production chain across India is affected. Petroleum-derived inputs permeate nearly every layer of construction: PVC pipes, waterproofing compounds, insulation materials, adhesives, paints, and packaging for cement and hardware all carry crude oil exposure. When freight costs rise simultaneously, as they do during Strait of Hormuz disruption, the compounding effect on landed material costs is significant.
Prices of steel, cement, tiles, wires, pipes, and glass have started increasing, a trend connected directly to global uncertainty, with rising fuel costs and disrupted logistics driving these price hikes. In 2025, material costs showed a mixed picture, cement, steel, and diesel prices declined mildly by 1-6%, while aluminium and copper experienced more significant increases of 8-10%, driven by global demand pressures and supply chain disruptions. The West Asia conflict now threatens to reverse even those modest commodity relief gains.
