The Union government has announced a reduction in the goods and services tax (GST) on cement from 28% to 18%, a move expected to stimulate demand ahead of the festive season and reduce costs for developers and infrastructure players.
Cement demand and pricing had already recovered in the first quarter of the ongoing fiscal, but industry analysts note that further growth is needed for cement makers to sustain margins, especially after recent mergers and acquisitions among top companies. Industry reports indicate cement demand rose by around 8% to 120 million tonnes in the first quarter.
For FY26, market estimates project cement demand to grow by 6–7% to approximately 480 million tonnes. While real estate shows strong demand, sluggish infrastructure activity in some states offsets overall growth despite central government spending.
In real estate, the GST reduction is expected to lower construction costs, with an estimated reduction of around Rs 12 per square foot in urban areas. Lower taxes on key construction materials like cement and steel will ease input costs, improve project viability, and potentially make housing more affordable, supporting broader infrastructure and housing development initiatives.
