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Budget Analysis

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Union Budget was presented in the parliament on February 29th, 2016. ICR team has tried to capture the impact of the budget on cement, infrastructure and real estate as viewed by CRISIL Research and various experts in the industry.

CRISIL Budget Analysis
Cement, impact positive
Higher spending on infrastructure to benefit in medium term Positive

Key budget proposals:

  • Investment towards national highways increased by 49 per cent to Rs 1032 billion (budgetary plus internal and extra budgetary resources).
  • Rs 170 billion for irrigation projects under Accelerated Irrigation Benefit Project.
  • Outlay towards urban infrastructure increased 11 per cent to Rs 166 billion.
  • Ready mix concrete manufactured at the site of construction exempted from excise duty.
  • Clean energy cess on coal (domestic and imported) doubled to Rs 400 per tonne.

CRISIL Research?s View:
The government?s focus on infrastructure is evident with the total targeted spending in FY17 increasing 28 per cent over FY16.
This, along with a number of benefits provided on affordable housing, would aid recovery in cement demand. Further, the rise in duties and tariffs in the form of clean cess on coal is expected to have a muted impact on total cost, which is expected to increase 0.2 per cent. Power and fuel cost (~25 per cent of cost of sales) will increase 1 per cent. However, amid rising demand, players will be able to offset this with a hike in prices.

Infrastructure, impact positive
Focus on dispute redressal, tax clarifications to aid investor confidence Positive Key budget proposals:
Budgetary allocation: Total outlay for infrastructure has been increased by 28 per cent to Rs 3.4 trillion (roads, railways and power the biggest beneficiaries). Of this, Rs 1.29 trillion is on account of budgetary support
Roads: Investments for development of national highways is proposed to be hiked 49 per cent on-year to Rs 1032 billion.
This is on the backdrop of spending being 16 per cent lower than FY16 budgeted estimates in the segment
Railways: Total outlay raised by 24 per cent to Rs 1,210 billion. In Railway Budget FY17, there have been numerous announcements for improvement of port connectivity and three new dedicated freight corridors
Airports & ports: No new projects announced barring Rs 8 billion earmarked for greenfield ports and national waterways. Overall, outlay for civil aviation has been reduced by 30 per cent to Rs 44 billion, mainly in line with reduced equity support to Air India
Funding availability: The government has provided flexibility for select state entities to raise capital up to Rs 313 billion by way of bonds across infra segments
Other measures: Dividend distribution tax waiver to be applicable on income distributed from SPVs to INVIT holding entity. Furthermore, a mechanism to renegotiate of contracts and a public utility bill will be introduced to streamline resolution of disputes in infrastructure related construction contracts

CRISIL?s View
The Budget reiterated focus on roads and railways with almost 76 per cent of the incremental government spending (budgetary allocation plus inter and extra budgetary resources) focused on these two segments. Also, the increase in budgetary allocations of Rs 250 billion towards various infra segments were muted compared with Rs 1090 billion in the last Budget.

This clearly reinforces a shift in funding dependence from government outlays to cash flows of government entities and their borrowing capability to drive public investments in the sector.Of the Rs 250 billion incremental budgetary support, almost Rs 130 billion is directed towards railways, followed by Rs 40 billion towards power, Rs 30 billion for urban development and Rs 25 billion, for roads, respectively. Given the targets relating to electrification of villages, the Budget provides a thrust on investments in the distribution segment of power with a 84 per cent on-year increase in planned expenditure for key schemes.

For EXIM-focused sectors such as airports and ports, focus on single window customs clearance, backed by process simplification, is targeted towards de bottlenecking of capacity amid lower budgetary allocations.

The Budget continued to build up investor confidence for investing in infrastructure segments by providing clarity on dividend distribution tax for entities like INVITs and giving confirmation on contract renegotiation and introduction of the public disputes utility bill. This comes at a time when private sector interest in infrastructure development is low and the balance sheets of many developers in the sector remain stretched.

We believe the rise in overall government spends will boost execution of national highway projects to about 5,200 km annually in 2016-17 and create a robust construction opportunity for road and railway engineering procurement & construction companies.

While the Budget provisions are positive, it will continue to put to test the execution capability of implementing agencies such as the National Highways Authority of India and Indian Railways. This comes on the backdrop of overall spending in national highways being 16 per cent lower in FY16 as compared with the allocations. Addressing on-ground issues such as clearances and land acquisition becomes extremely critical to ensure a sharp increase in project execution.

Real Estate:
Affordable housing gets a shot in the arm; commercial realtors also benefit Positive

Key budget proposals:

  • Measures on affordable housing projects

  • Interest deduction limit under Sec 80EE increased from Rs 1 lakh to Rs 1.5 lakh for first-time home buyers (applicable only on loans not exceeding Rs 35 lakh for houses costing below Rs 50 lakh and sanctioned during April 1, 2016, to March 31, 2017) for the entire loan duration

  • Under the Pradhan Mantri Awas Yojana, 100 per cent deduction on profits from housing projects approved between June 2016 and March 2019, and completed in three years of getting approval and satisfying the following conditions, refer to Table 1

  • Service tax exemption on construction of affordable houses up to 60 square meters (646 sq ft) under any central or state government scheme, including public-private partnerships (PPPs)

  • Phasing out of deductions allowed on capital expenditure (other than land, goodwill and financial assets) under Sec 35AD from 150 per cent to 100 per cent w.e.f. April 1, 2017, for affordable housing projects

  • Exemption of dividend distribution tax (DDT) on distribution made by special purpose vehicles (SPVs) to real estate investment trusts (REITs)

  • Revival of national land record digitisation scheme with a funding of Rs 1.5 billion

  • 0.5 per cent Krishi Kalyan Cess on all taxable services

CRISIL Research?s View
Boost to affordable housing – especially tier II and tier III cities

Affordable housing segment has received a shot in the arm with the abovementioned measures and will see increased demand and PPPs in the medium term.

Increase in interest deduction for first-time home buyers will boost demand for homes priced in that bracket. Currently, nearly 40 per cent of the upcoming supply in the 10 major cities tracked by CRISIL Research is priced under Rs 50 lakh. The proportion of upcoming supply in this price bracket in tier II and tier III cities is expected to be even higher.
Refer to Graph 1

Table-1

(sq mt) 4 Metros Other cities
Maximum size of house 30 60
Minimum size of land parcel 1,000 2,000
Other,Within 25 km of municipal limit

However, the phasing out of deductions on capital expenditure will be a dampener to some extent.
Removal of DDT for SPVs distributing income to REITs is a positive for developers with significant exposure to rental-yielding real estate assets.
Digitisation of land records will aid transparency in the real estate sector and help tap foreign capital inflows in the medium to long term.
Krishi Kalyan Cess, applicable for under-construction projects, will hurt the industry marginally.
However, minimum alternate tax will apply.
Union Budget 2016-17 brings hopes of revival for the cement industry

?Rs 97,000 crore of outlay that has been kept for roads and infra by the finance minister is very promising and the industry will get a lot of benefits from this particular allocation of funds,? said Amandeep Gupta, joint CEO of OCL Cement, the flag ship company of Dalmia Group.

Middle and low income groups are benefitted by providing exemption on service tax on construction of affordable home and increase in tax exemption on home loan, a boost to first time home buyers. That makes housing more affordable. Infrastructure being part of the key pillars of the budget is something to look forward to in the long run. With 85% road projects coming back on track.

The industry has also acknowledged that the finance minister?s approach for this budget has been very targeted. ?He has laid a structure for an inclusive growth rather than distributing subsidies,? said Gupta.

The cement sector for quite some time had been asking for the removal of excise duty on ready-made cement, which was 12.5 per cent. The industry among its recommendations to the government has also been asking for the initiatives to lower the tax burden on the industry. In its annual report 2014-15, CMA acknowledged that cement is highly taxed at 60 per cent of ex-factory price, which is even more than the taxes levied on the luxury items.

?Exemption of excise duty on RMC is one of the encouraging moves taken by the finance minister. This step is another value addition in making the budget positive for the cement sector,? said MS Mani, senior director, Deloitte.

Source: ECONOMIC TIMES

Doubled Coal Cess to increase power tariff by 15 paisa/unit
The effort of the NDA government to give enhanced push to clean energy and environment conservation would lead to spiking of power price. The government for the third time in a row increased the cess on coal, lignite and pite production to Rs 400 per tonne to fund clean energy projects.

As the increase in price of coal comes under ?change of law? regulation of the Electricity Act and Tariff Policy, any change in price would be reflected in the final power tariff. As per industry calculations, this would amount to a change of 12-15 paisa per unit in the final power tariff.

Indian power industry consumes close to 500 million tonne of coal annually and with doubling of cess, close to 800 billion units of electricity will witness the impact of increased price of coal.

During the current fiscal, the coal cess collected was around Rs 12,000 crore taking the total to Rs 50,000 crore.

In the last Union Budget, cess on coal was doubled to Rs 200 per tonne. In his maiden budget in July 2014, Arun Jaitley increased it to Rs 100 per tonne from Rs 50 per tonne. The cess is collected as National Clean Energy Fund and is disbursed for renewable energy based initiatives and power projects.

But with the change in name to Clean Environment Fund, it is expected that the fund would be used for environment conservation drives of the government as well.

The heavy weight projects depending on NCEF for their funding are Rs 40,000 crore Green Energy Corridor project and to be launched National Wind Energy Mission, which will entail a total expenditure of Rs 18,000 crore.

Source: BUSINESS STANDARD

Steel, cement to cost more
Shailendra Chouksey, President, Cement Manufacturers? Association, and whole-time director, JK Lakshmi Cement, said cement prices would rise by? 3-4 a bag just on account of the clean environment cess.

?The total tax incidence on cement is over 60 per cent of the ex-factory realisation. The Krishi Kalyan Cess at 0.5 per cent on all taxable services from June 1 will push up production costs further,? he added.

Ready-mix woes
Ready-mix concrete (RMC) players believed that their long-pending demand of exemption of excise duty on RMC plants has finally been addressed but it is applicable only to dedicated RMC plants on site, the percentage of which is almost negligible, said Chouksey.

Ajay Kapur, Managing Director, Ambuja Cements, said while profitability of the cement industry would be impacted by the increase in cess, the excise on HDPE (high-density polyethylene) packaging bags (for 12.5 per cent to 15 per cent) and decrease in sale commission (from 10 per cent to 5 per cent) would add to the industry?s woes.

Source: THE HINDU BUSINESS LINE

Mahendra Singhi, Group CEO-Dalmia Cement in conversation with ICR
The focus of the budget has been on rural India and finance minister has thought ?how to boost up the economy?? Larger attention has been paid to the farm sector. FM?s efforts will have multiplying effect on the economy.

The second important aspect of the budget is allocation for infrastructure. Never before such allocation was done. There are many projects which have been held up and some remedial measures are required to be taken to rescue these projects. Funds have been made available for not just highways but also for ?Pradhan Mantri Gram Sadak Yojana? which is mainly for rural India. The allocation for MNREGA is another positive feature of rural focus.

We were expecting industry status will be given to infrastructure but that did not happen. Irrigation has been provided separate funding which is a long term investment and it is certainly a welcome feature of the budget.

The enhancement of carbon cess to Rs. 400 will have some impact but it is a movement in the direction of Green Energy. It will support generation of Solar and Wind power.

While giving concessions, the budget takes into account affordable housing, rental housing and first time home buyers.The taxation on provident fund withdrawn is some how difficult to digest. It is slightly going against the principles of saving habits.

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Economy & Market

The Road Ahead Begins Here

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The future of India’s roads took centrestage at RAHSTA Expo 2026, where policymakers, contractors and industry leaders came together under one roof. The event blended thought leadership, technology showcase and industry recognition into a single powerful platform.

India’s roads and highways community gathered in full strength at the Jio World Convention Centre, Mumbai, for the 16th edition of the RAHSTA Expo (Roads and Highways Sustainable Technologies & Advancement). Over two action-packed days, the event brought together policymakers, contractors, consultants, developers, equipment manufacturers, material suppliers, technology providers and investors to deliberate on the future of India’s ,infrastructure while showcasing the latest innovations driving the sector.

The event culminated in the prestigious RAHSTA Awards, where Shri. Ajay Tamta, Union Minister of State for Road Transport & Highways, felicitated organisations and professionals for their outstanding contributions to road construction, engineering, safety, sustainability and technology. With leading contractors, senior government officials, industry veterans and technology providers under one roof, the event reaffirmed RAHSTA’s position as one of India’s most influential platforms for the roads, highways, bridges and tunnels ecosystem.

Organised by FIRST Construction Council in association with ASAPP Info Global Group, RAHSTA has steadily evolved beyond an exhibition into a platform where policy, technology, engineering and business converge to address the opportunities and challenges shaping India’s next generation of transport infrastructure.

Beyond expansion, towards value

The conference opened with a thought-provoking address by Pratap Padode, Founder and Editor-in-Chief, Construction World, who observed that India’s highways sector has reached an important inflection point. Introducing this year’s theme – ‘From Expansion to Value: The Next Phase of India’s Highways’ – he noted that while the country has successfully expanded its road network over the past two decades, the industry’s priorities are now shifting towards building infrastructure that delivers greater lifecycle value, durability, safety and operational efficiency. With funding pressures, asset monetisation and evolving project models changing the sector’s dynamics, he said the focus must now move beyond kilometres constructed to the quality and long-term performance of every asset.

Dr Brijesh Dixit, Managing Director, Maharashtra State Infrastructure Development Corporation (MSIDC), reminded delegates that successful infrastructure delivery is ultimately a collective effort. Emphasising on collaboration between government, industry and engineering professionals, he remarked, “There is no loser in a winning team, and there is no winner in a losing team,” urging stakeholders to work together to deliver projects with quality, financial sustainability and technological excellence.

Delivering the keynote address, Bidur Kant Jha, Director, New Technologies for Highway Development, Ministry of Road Transport & Highways (MoRTH), outlined the Government’s long-term vision for India’s highway network. Highlighting the country’s 6.26 million km roads network, he spoke about the growing adoption of digital planning tools such as BIM and GIS, bridge health monitoring systems and Integrated Smart Transport Corridors under the Vision 2047 roadmap. He emphasised that while India remains open to global innovations, every new technology must be adapted to Indian conditions before large-scale deployment.

Addressing the gathering during the awards ceremony, Tamta underlined the increasing role of specialised equipment and modern construction technologies in executing complex infrastructure projects across diverse terrains. Referring to challenging tunnel projects in Uttarakhand, he noted how advanced machinery has transformed execution capabilities, while also acknowledging the rapid evolution of Indian contractors into globally competitive infrastructure companies. Recognising excellence through industry awards, he said, motivates organisations to continually raise performance standards and embrace innovation.

Meanwhile, Dr Sanjay Mukherjee, IAS, Metropolitan Commissioner, MMRDA, highlighted that infrastructure development must increasingly focus on integrated urban mobility. Reflecting on Mumbai’s engineering journey – from its historic underground utility network to the Coastal Road and other transformative projects – he underlined that future infrastructure planning must seamlessly integrate roads, metro systems and public transport to create efficient, multimodal cities.

Uttar Pradesh takes centrestage

One of the highlights of the second day was Uttar Pradesh’s comprehensive presentation on its infrastructure-led industrial transformation.

Srihari Pratap Shahi, IAS, Additional CEO, Uttar Pradesh Expressways Industrial Development Authority (UPEIDA), demonstrated how the state’s expanding expressway network is evolving into a catalyst for industrial development through integrated manufacturing and logistics clusters. Expressways, he noted, are no longer merely transport corridors but engines of economic competitiveness.

Building on this narrative, Deeksha Jain, IAS, Additional Chief Executive Officer, Uttar Pradesh State Industrial Development Authority (UPSIDA), showcased the state’s rapidly expanding industrial ecosystem supported by extensive expressway connectivity, dedicated freight corridors, airports, industrial townships and investor-friendly policies. She highlighted Uttar Pradesh’s strong manufacturing growth, expanding industrial land bank, plug-and-play infrastructure and increasing use of digital governance to facilitate investments.

Further underlining the significance of the platform, Deepak Kumar, IAS, Infrastructure & Industrial Development Commissioner, Government of Uttar Pradesh, remarked, “RAHSTA provides an excellent platform for states to showcase our infrastructure progress and investment ecosystem. Uttar Pradesh has transformed significantly over the past decade, backed by more than 34 investor-friendly industrial policies, and platforms like RAHSTA help communicate these developments to industry stakeholders from across the country.”

Ideas that shaped the industry conversation

The two-day conference featured seven panel discussions, each examining a critical dimension of India’s evolving roads and highways sector.

The opening discussion on ‘Financing Roads & Highways in a Capital-Constrained Era’ brought together experts from Cube Highways, NIIF, SBI Capital Markets, Centrum Capital and Bandhan Infra Fund, who examined how the financing landscape is changing. Discussions revolved around asset monetisation, InvITs, institutional investments and new funding structures, with panellists agreeing that better project preparation, transparent governance and predictable returns will be crucial for attracting long-term capital into infrastructure.

Attention then shifted to execution realities during the panel on ‘Contractors’ Perspective: Execution Realities, Risks & the Quality Imperative.’ Representatives from GHV Infra Projects, PNC Infratech, NCC and Maccaferri candidly discussed the challenges of delivering projects amid contractual complexities, land acquisition delays, rising costs and tight timelines. While execution pressures remain significant, the discussion reinforced that better collaboration across the project value chain is essential for achieving both speed and quality.

Day 2 opened with a technically rich discussion on ‘Designing Roads for Sustainability, Durability & Climate Resilience’. Experts from CSIR-CRRI, IIT Bombay, IIT Madras, Zydex Group and SRMB Steel explored advanced pavement technologies, recycled materials, climate-resilient designs and scientific construction practices that can significantly improve durability while lowering lifecycle costs. Sustainability, they agreed, must become an integral part of road design rather than an afterthought.

The subsequent session on ‘Bridges & Tunnels: Complex Engineering, Safety & Future Readiness’ highlighted the growing complexity of India’s infrastructure projects. Panellists discussed advances in structural engineering, digital monitoring, risk management and safety practices that are enabling the successful delivery of increasingly ambitious bridge and tunnel projects across the country.

Technology remained a recurring theme during the discussion on ‘Technology as a Risk-Mitigation Tool for Developers & Investors’. Experts explained how AI, BIM, drones, predictive analytics, digital twins and intelligent monitoring systems are helping improve project planning, minimise execution risks, strengthen quality assurance and enhance asset management throughout the infrastructure lifecycle.

The construction equipment panel brought together leading industry experts to examine how technology, sustainability and digitalisation are redefining construction equipment in an era of rising cost pressures. Discussions centred on enhancing productivity, reducing lifecycle costs and preparing the industry for India’s infrastructure ambitions leading up to 2047.

The conference concluded with an engaging CXO Forum on ‘Rebuilding Confidence in India’s Roads & Highways Sector’, where senior industry leaders emphasised that stronger governance, better project preparation, digitalisation, transparent contracting and closer public-private collaboration will be essential to sustain India’s infrastructure growth over the coming decades.

Technology and recognition under one roof

Beyond the conference halls, RAHSTA Expo reflected the technological transformation underway across India’s road infrastructure ecosystem. Leading equipment manufacturers, technology companies and material suppliers showcased advanced construction equipment, intelligent digital platforms, pavement technologies, structural materials and productivity-enhancing solutions designed to improve project efficiency and asset performance. The exhibition created valuable opportunities for contractors, consultants, government agencies and project developers to evaluate new technologies while interacting directly with solution providers.

The event also served as a celebration of excellence through the RAHSTA Awards 2026, which recognised outstanding achievements across road construction, contracting, materials, equipment, technology, safety, sustainability and infrastructure development. Presented by Minister Tamta, the awards honoured organisations that are setting new benchmarks for quality, innovation and execution across India’s roads sector.

RAHSTA Expo 2026 also received extensive support from across the infrastructure ecosystem. Alongside leading corporate sponsors, the event was backed by industry bodies including the Builders Association of India (BAI), Construction Equipment Rental Association (CERA), Consulting Engineers Association of India (CEAI), International Road Federation (IRF), CSIR-CRRI, CILT India, All India Transporters Welfare Association, Hydraulic Trailer Owners Association (HTOA), Gujarat Contractors Association, Bitumen Forum, Fluid Power Society of India, Indian Institute of Material Management, Ministry of Ports, Shipping and Waterways, Gati Shakti Vishwavidyalaya and Mumbai First, reflecting the industry’s collective commitment to advancing India’s road infrastructure.

As the curtains came down on the two-day event, one message resonated throughout the conference: India’s highways story is entering a new chapter. While expansion will continue, the future will increasingly be defined by smarter planning, stronger partnerships, digital transformation, sustainable engineering and long-term value creation. By bringing together the entire infrastructure value chain on a single platform, RAHSTA Expo 2026 once again demonstrated why it has become one of the country’s most influential forums for shaping the future of roads, highways, bridges and tunnels.

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Economy & Market

Fornnax Names Lukas Baur as Authorised Service Partner to Bolster EU Operations

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Strapline: Fornnax Technology has appointed NOBA Maschinenservice’s Lukas Baur as its authorised service partner for the European Union, strengthening its commitment to delivering fast, reliable, and localised after-sales support across the region.

Fornnax Technology, a leading manufacturer of industrial shredding solutions, has announced the appointment of Mr. Lukas Baur of NOBA Maschinenservice as its authorised service partner for the European Union. The partnership, formalised under the authorisation of Fornnax CEO Mr. Jignesh Kundaria, reinforces the company’s commitment to providing dependable, localised service support to its expanding customer base across Europe.

Strengthening Service Through Proven Expertise

With over two decades of experience in servicing, maintaining, and overhauling industrial shredders, Mr. Baur brings extensive technical expertise to the partnership. His capabilities span welding, hardfacing, shaft and knife rebuilding, complex assembly, hydraulics, and complete electrical engineering services, delivered in collaboration with a trusted partner company based in Halle/Saale.

Operating from Worbis, Germany, Mr. Baur is strategically positioned to provide emergency support across the European Union within 24 hours, covering an operational radius of approximately 1,000 kilometres.

Supporting this capability is a well-equipped service infrastructure comprising 12 Mercedes Sprinter service vans, a team of 24 skilled technicians, specialised bearing-change tools, a fully equipped hydraulic workshop, and a 1,000-square-metre facility with a five-ton crane track. Together, these resources position his team to manage the complete spectrum of Fornnax’s European service requirements efficiently and reliably.

Partnership Driven by Industry Insight

Having spent years servicing Eldan, Lindner, and Vecoplan shredders across the European recycling industry, Mr. Baur’s decision to collaborate with Fornnax is rooted in his understanding of market needs and customer expectations. His experience has provided valuable insight into what recycling plant operators require—not only from their machinery but also from the service teams supporting them.

According to Mr. Baur, Fornnax’s reputation for robust machine construction, superior wear protection, and maintenance-friendly design made the partnership a natural fit.

The collaboration comes at a time when Europe’s tyre recycling industry is facing mounting challenges, including rising cost pressures, shrinking margins, delayed investments, and a shortage of skilled labour. Mr. Baur believes these conditions reinforce the need for technically strong service partners capable of delivering rapid, dependable support.

Commenting on the partnership, he said, “Fornnax, with its exceptional price-performance ratio and superior quality, has the potential to become a market leader in Europe. We would like to be their service partner in this journey.”

Comprehensive Support Across the Equipment Lifecycle

As Fornnax’s authorised service partner, Mr. Baur will oversee the complete lifecycle support of the company’s equipment throughout the European Union. His responsibilities will include installation, commissioning, preventive maintenance, emergency repairs, and spare parts support across mechanical, hydraulic, and electrical systems.

Looking ahead, he also plans to develop a centralised spare parts distribution hub for European customers, particularly if Fornnax establishes a warehouse facility in Worbis to facilitate faster deliveries. To further strengthen service coverage, Mr. Baur intends to expand operations by adding two to three additional service teams and vehicles each year, progressively increasing capacity across the continent.

A Shared Commitment to Customer Excellence

Highlighting the strategic importance of the partnership, Mr. Jignesh Kundaria, Director and CEO of Fornnax, said:

“We strongly believe that by continuously improving our service quality and customer satisfaction index, we can build long-term relationships with our customers. Higher customer satisfaction leads to greater trust, which significantly increases repeat orders and ultimately drives sustained growth in our sales revenue.”

This customer-first philosophy underpins Fornnax’s strategy of building a dedicated European service partner network instead of relying solely on remote support. With Mr. Baur joining this network, customers across the European Union will benefit from faster response times, expert technical assistance, and dedicated on-ground support from a partner with extensive experience in high-throughput shredding operations.

Mr. Baur’s appointment also reflects Fornnax’s broader ambition to establish itself as the preferred shredding solutions provider for the European recycling industry, marking another important milestone in the company’s international growth strategy.

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Concrete

Reimagining the Future

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From LC3 and AI-driven kilns to RDF gasification, ICR explores the full breadth of technological innovation reshaping India’s cement industry. Low-carbon materials, digital manufacturing, alternative fuels and breakthrough concrete science are collectively advancing the sector’s transition from high-emission commodity producer toward a net-zero, infrastructure-ready future.

Innovation has become the defining force shaping the future of the cement industry. As the world’s second-largest cement producer, India is witnessing rising demand driven by infrastructure development, urbanisation, affordable housing, and industrial growth. At the same time, the International Energy Agency (IEA) estimates that cement production accounts for nearly 7 per cent to 8 per cent of global CO2 emissions, with clinker manufacturing contributing the largest share, making innovation an operational necessity. The industry is therefore investing heavily in low-carbon cement technologies, artificial intelligence (AI), digital manufacturing, alternative fuels, renewable energy and carbon capture, utilisation and storage (CCUS). Innovations such as limestone calcined
clay cement (LC3), supplementary cementitious materials (SCMs), AI-driven process optimisation and automated quality control are enabling manufacturers to produce more sustainable, efficient, and high-performance cement.
According to the Global Cement and Concrete Association (GCCA), achieving net-zero emissions will require a combination of material innovation, digital transformation, circular economy practices and collaborative research, making innovation central to the industry’s long-term competitiveness and India’s sustainable infrastructure growth.

Next-generation cement
The future of cement lies in reducing its dependence on clinker-the most carbon-intensive component of cement-through the adoption of low-carbon materials and advanced blended cement technologies. Products such as Portland Pozzolana Cement (PPC), Portland Slag Cement (PSC), Portland Composite Cement (PCC), and LC3 are driving this shift by replacing clinker with SCMs like fly ash, GGBS, calcined clay and limestone.
According to GCCA, SCMs can replace 30 to 50 per cent of clinker, with some applications exceeding 70 per cent, significantly reducing carbon emissions without compromising strength or durability. These blended cements also improve concrete performance by enhancing durability, reducing permeability, and increasing resistance to chloride and sulphate attacks. As the availability of traditional SCMs declines with the decarbonisation of the power and steel sectors, the industry is increasingly exploring alternative materials and next-generation cement formulations to support long-term sustainability.
Shrivats Singhania, Deputy Managing Director, JK Lakshmi Cement, says, “Innovation is enabling the cement industry to address one of its most important challenges – producing more with fewer resources and lower emissions. Across the value chain, manufacturers are deploying technologies that simultaneously improve operational efficiency and advance sustainability goals. For example, greater adoption of alternative fuels, waste heat recovery systems, renewable energy, and digital process controls is helping reduce energy consumption and optimise resource utilisation. Data-driven manufacturing allows plants to monitor operations in real time, improve equipment reliability, minimise downtime, and reduce wastage, resulting in both environmental and economic benefits.”
“Meaningful progress is also being achieved through material innovation. The growing use of blended cements and next-generation products such as LC3 reduces dependence on clinker, the most carbon-intensive component of cement production, thereby lowering embodied carbon without compromising performance,” he adds.
Among emerging technologies, LC3 has gained global recognition as one of the most promising low-carbon cement innovations. In a standard formulation, LC3 comprises approximately 50 per cent clinker, 30 per cent calcined clay, 15 per cent limestone, and 5 per cent gypsum. LC3 can reduce CO2 emissions by up to 40 per cent compared with Ordinary Portland Cement (OPC) while delivering comparable strength and enhanced durability. Its reliance on abundant, locally available raw materials, rather than industrial by-products, makes it highly scalable and well suited to countries like India.
According to the LC3 Project, nearly 75 per cent of cement plants worldwide could adopt LC3 using existing manufacturing infrastructure, potentially reducing global CO2 emissions by over 400 million tonnes annually, if adopted at scale globally. India’s introduction of BIS standard IS 18189:2023 for LC3, coupled with its adoption in projects such as the Noida International Airport, marks a step toward commercial implementation. As demand for sustainable construction grows, LC3 is poised to become a cornerstone of low-carbon infrastructure development.

Making of a smart cement plant
The modern cement plant is rapidly evolving into a digitally connected, AI-enabled manufacturing ecosystem where data drives every aspect of production – from raw material proportioning and kiln operations to quality control, maintenance and energy management.
According to IEA, digital technologies can improve energy efficiency in heavy industries by 10 per cent to 20 per cent. Advanced process control systems in cement plants have demonstrated the potential to reduce thermal energy consumption by 3 to 5 per cent, lower electricity consumption by 2 to 10 per cent, and improve kiln throughput and clinker quality. AI-powered predictive maintenance further helps reduce unplanned equipment downtime by 30 to 50 per cent and extend equipment life by continuously analysing sensor data to detect failures before
they occur.
Jignesh Kundaria, Director and CEO, Fornnax Technology, says, “AFR is no longer viewed solely as a sustainability initiative. It has become a strategic business priority for cement manufacturers. Rising fuel costs, stricter environmental regulations, and growing pressure to reduce dependence on conventional fuels are accelerating AFR adoption across the industry. However, the success of an AFR project depends heavily on how effectively waste is processed before it reaches the kiln. Poor preprocessing can negatively impact kiln performance, fuel efficiency, and emission control systems. Inconsistent fuel
quality often forces operators to make frequent adjustments, reducing throughput and increasing energy consumption.”
Dr Kapil Kukreja, General Manager, NCCBM, says, “Variations in composition, particle size, and calorific value can lead to inconsistent combustion behaviour resulting in fluctuating heat release patterns. These fluctuations can affect process stability, temperature control and clinker quality. Additionally, incomplete combustion of RDF particles can result in increased emissions, higher unburnt carbon content, and operational difficulties within the calciner system. Higher ash and inert content of RDF can dilute the clinker quality and reduce calciner efficiency.”
Meanwhile, digital twins are allowing manufacturers to simulate entire production processes, optimise kiln performance, evaluate process changes virtually, and reduce operational risks before implementation. Automated Laboratory Information Management Systems (LIMS), coupled with online and offline XRF and XRD analysers, are delivering real-time monitoring of clinker chemistry and mineralogy, ensuring tighter quality control, lower clinker variability and more consistent cement performance.
Dr Prateek Sharma, Group Project Manager, NCCBM, explains, “Chlorides and alkalis present in RDF can lead to excess buildup and blockages in the kiln and calciner increasing the downtime of cement plants. Hence, issues with direct utilisation of RDF establishes the need for fuel conditioning and alternative utilisation approaches that can maximise the energy potential of RDF while minimising adverse impacts on plant operation. RDF gasification emerges as an efficient tool for converting solid RDF into syngas which can be used as a fuel with improved characteristics.”
Digitalisation and intelligent manufacturing will be among the most critical enablers of achieving the cement industry’s net-zero ambitions by improving operational efficiency while simultaneously reducing energy consumption and greenhouse gas emissions, confirms a GCCA report.

From research to reality
While the cement industry has made remarkable progress in developing breakthrough technologies, the transition from laboratory research to large-scale commercial deployment remains one of its greatest challenges. The successful adoption of innovations such as LC3), CCUS, advanced alternative fuels, green hydrogen and novel SCMs depend not only on technical feasibility but also on economic viability, regulatory support, raw material availability, and market acceptance.
Veerendra Jamdade, CEO and Founder, Vritti Solutions, states, “The cement industry has a market that is constantly in flux, due to factors such as infrastructure investment, seasonality of demand, fuel costs, building activity by region and general economic cycles; therefore, having accurate forecasts is very important in this type of market. Traditional ERP systems are primarily data repositories with limited analytic functionality; thus, they capture transactional and operational information but generally lack advanced analytical capabilities for converting captured data into actionable information. This
affects everything from demand forecasting and inventory planning through procurement and production scheduling.”
According to IEA, technologies that are still at the demonstration or early commercial stage-including CCUS and next-generation low-carbon binders-are expected to contribute nearly 40 per cent of the emissions reductions required for the global cement sector to achieve net-zero emissions by 2050, underscoring the importance of accelerating their scale-up. This requires robust R&D ecosystems, stronger collaboration between cement manufacturers, research institutions, technology providers,
equipment suppliers, and policymakers, as well as supportive standards and financial incentives to reduce investment risks.
Ashutosh Pandita, Director – Head, Cement Business, TKIL Industries, elaborates, “The cement industry’s most transformative innovation today is the increased use of alternative fuels and raw materials (AFR), supported by advanced feeding systems and process technologies that are driving both operational efficiency and decarbonisation. Looking ahead, oxyfuel combustion and carbon capture technologies remain underappreciated but hold immense potential for enabling deep reductions in carbon emissions and accelerating the industry’s journey towards net-zero production. By 2030, cement manufacturing is expected to become significantly more sustainable, energy-efficient, and technology-driven, with widespread adoption of AFR, low-clinker cement technologies, greater digitalisation and automation, and the early commercial deployment of carbon capture solutions, all supported by stronger industry collaboration and a shared commitment to achieving long-term sustainability goals.”
In India, organisations such as the National Council for Cement and Building Materials (NCCBM), leading academic institutions, and major cement companies are working together to develop and validate emerging technologies, while the introduction of standards such as IS 18189:2023 for Limestone Calcined Clay Cement (LC3) marks a significant step towards commercial adoption. However, challenges such as high capital investment, long validation cycles, limited infrastructure for technologies like CCUS, fluctuating availability of alternative raw materials, and customer acceptance continue to slow implementation. Bridging the gap between research and commercial reality will therefore require sustained investment in innovation, knowledge-sharing, pilot projects, policy support, and industry-wide collaboration to ensure that promising technologies evolve into scalable, economically viable solutions capable of transforming the future of cement manufacturing.

Creating a green future
Clinker production will increasingly rely on low-carbon technologies such as LC3, high-volume SCMs, AFR, renewable energy, waste heat recovery, and eventually CCUS, enabling manufacturers to significantly reduce their environmental footprint.
Achieving net-zero concrete by 2050 will require a combination of clinker substitution (around 37 per cent of cumulative CO2 reductions), carbon capture technologies (approximately 36 per cent), and improvements in thermal efficiency, renewable energy, and circular economy practices.
Industry Expert SA Khadilkar comments, “Customer requirements are a key driver of innovation in the cement industry, influencing product development, process improvements, sustainability initiatives, and digital solutions. Innovation is most effective when it addresses real market needs, particularly in areas such as performance, durability, and application-specific requirements. Around a decade ago, ACC and Ambuja Cements (now Adani Cement) recognised this shift and introduced performance-oriented blended cement brands with enhanced durability, reduced water penetration, and OPC-like properties. Their success encouraged other major cement manufacturers to develop specialised cement brands with unique performance characteristics, demonstrating how product innovation has evolved to meet changing customer expectations.”
“Ultimately, customer expectations have transformed innovation from a technology-driven exercise into a market-driven strategy, ensuring that new developments create measurable value across the construction value chain,” he adds.
India is expected to add nearly 500 million square metres of urban built-up area by 2030, driving sustained demand for greener, more durable, and higher-performing construction materials, according to NITI Aayog. Meeting this demand will require cement manufacturers to evolve from commodity producers into integrated providers of sustainable building solutions, supported by data-driven manufacturing, collaborative R&D, customer-centric product innovation, and circular resource management. The cement plant of tomorrow will therefore be defined not only by its production capacity but also by its ability to manufacture smarter, cleaner, and more sustainable construction materials that support India’s ambitious infrastructure and climate goals.

Conclusion
The path ahead is clear in its direction, if not yet in its pace. India’s position as the world’s second-largest cement producer, combined with its infrastructure ambitions and its 2070 net-zero commitment, makes this transition both urgent
and consequential.
What this article has made evident is that no single technology will carry the industry to net zero. LC3 addresses clinker dependency. Digital manufacturing addresses efficiency and waste. Alternative fuels address fossil fuel dependence. CCUS addresses the residual process emissions that no other lever can reach. Each is necessary. None is sufficient alone. The industry’s task is to advance all of them simultaneously, at a pace that matches the scale of the challenge.
The plants that will build tomorrow’s highways, airports and homes will need to do so with a fraction of today’s carbon footprint.

Innovations in cement and concrete

  1. Carbon mineralisation in concrete: A 2026 peer-reviewed study in the Journal of the American Ceramic Society by MIT’s Masic Lab and CarbonCure Technologies used in-situ Raman microspectroscopy to show that CO2 injected during cement mixing triggers a three-stage hydration sequence, producing a more uniform microstructure with approximately 13 per cent higher early strength while permanently sequestering carbon within the concrete matrix.

Source: www.carboncure.com

  1. Zero-clinker geopolymer blocks: Theseus Development manufactures geopolymer blocks using upcycled aluminosilicate waste from quarries and mines through an inorganic polymerisation process, achieving up to 80 per cent lower embodied carbon compared to conventional cement blocks. An interlocking block design reduces mortar requirements, lowering construction costs while eliminating clinker entirely from the production process.

Source: www.rmi.org

  1. 3D-printed basalt fibre grids: Austrian startup Fiber Elements, founded in 2023, uses robotically wound continuous basalt fibres arranged into three-dimensional reinforcement grids that replace steel in concrete structures. The resulting composites are three times stronger than steel, weigh two-thirds less, resist corrosion entirely and reduce CO2 emissions by up to 70 per cent compared to conventional steel-reinforced concrete.

Source: www.eitmanufacturing.eu

  1. Self-healing concrete: Dutch company Basilisk leads commercial deployment of bacteria-based self-healing concrete, with licensed production now active in Japan and a highway viaduct pilot planned for 2026. Dormant Bacillus bacteria embedded in the mix activate upon crack formation, metabolising nutrients to precipitate calcium carbonate that autonomously seals fractures. The global self-healing concrete market is projected to grow significantly through 2031, driven by green building mandates and infrastructure agencies targeting lower maintenance costs and extended structural life.

Sources: www.thelegaljournalontechnology.com and www.mordorintelligence.com

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