India’s cement industry stands at a transformative juncture.
The recent launch of the nation’s first cluster of Carbon Capture and Utilisation (CCU) testbeds—an academia-industry collaboration aimed at the cement sector—is more than a symbolic stride. It signals a commitment to deep decarbonisation pathways, essential to achieving India’s net-zero emissions target by 2070. The CCU initiative holds promise not just for emissions mitigation, but as a scalable, commercially viable technology that could redefine the sustainability narrative across the value chain.
CCU in cement can unlock new revenue streams through utilisation pathways like building materials, fuels and chemicals. Stakeholders view this as a strategic enabler for compliance with tightening carbon regulations and investor scrutiny. The initiative may catalyse a robust carbon tech ecosystem, with ripple effects across allied industries. Success here could significantly reduce the sector’s carbon intensity per tonne of cement produced.
On the other side of the ledger, operational realities persist. A premature monsoon this year has tempered dealer optimism, with subdued despatches expected through June. Historically, the monsoon season dampens construction momentum, impacting cement off-take and putting short-term pricing power under pressure.
Despite such cyclical headwinds, FY25 closed on a robust note, with installed capacity touching 655 MTPA—up 4.8 per cent year-on-year. A notable 11 per cent surge in cement volumes in Q4, spurred by accelerated infrastructure execution and commercial real estate activity, offset the lukewarm performance in H1.
Looking ahead, FY26 is projected to deliver demand growth in the range of 6 to 7.5 per cent, underpinned by government push in roads, housing, and rural infrastructure. The industry will, however, need to balance this growth with rising ESG obligations, fluctuating fuel costs and evolving regulatory expectations.
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