India's cement industry added a record 62 million tonnes per annum of new production capacity in FY26, the highest annual capacity addition in a decade, as producers responded to robust demand from the real estate, roads, railways and urban infrastructure sectors. Total installed capacity in India's cement industry crossed 700 MTPA, maintaining India's position as the world's second-largest cement producer after China.
UltraTech Cement, India's largest cement maker, accounted for 18 MTPA of the new capacity additions as it expanded its footprint in southern India and Rajasthan. Shree Cement added 8 MTPA while Ambuja Cements and ACC, now under Adani Group management, together added 12 MTPA. Several regional players also commissioned new kilns to serve local markets. Despite capacity additions, average industry utilisation improved to 72% from 68% as demand growth of 9% absorbed new supply.
The capacity expansion cycle is expected to continue in FY27 with approximately 50 MTPA of additional capacity planned. Cement companies are investing heavily in green manufacturing — using alternative fuels, waste heat recovery and blended cements — to reduce carbon intensity. The industry is targeting 45% reduction in CO2 emissions per tonne of cement by 2030 as it aligns with India's climate commitments. Pricing discipline among leading players has helped maintain EBITDA margins at Rs 900-1,200 per tonne despite cost pressures.
