REINFORCING Construction Industry
The emerging growth in construction industry has created new demand push for building and construction materials in India. Construction Times finds out the emerging trends, new opportunities and challenges in the market for cement, steel and other building materials.
India’s construction industry is experiencing rapid growth in the recent years with the government focus on infrastructure development. These developments are broadly catering to the sectors such as transportation, water and irrigation, energy, urban infrastructure and real estate. Currently the fourth-largest construction market globally after the US, China and Japan, our country is set to become the third-largest construction market globally in 2025 with a consolidated value of $1.4 trillion. In India’s quest to become the third-largest construction market globally, the construction materials play a key role in the growth of the construction market with cement and steel leading the trend.
Cement: Building a strong future
India’s cement industry was valued at $26.02 billion in FY2024 and is anticipated to grow with a CAGR of 8.04 per cent through 2030, according to a TechSci Research report. The expected growth is attributed to rapid urbanisation in India that demanded more housing and commercial spaces, necessitating the need for more cement to construct projects. The government’s ambitious plans to develop highways, rural roads, smart cities, affordable housing and irrigation projects have led to massive usage of cement in these projects. Also, the government plans to construct more concrete roads, highways and airport runways have further fuelled the growth prospects of cement and concrete.
In spite of these emerging opportunities from the construction sector, the cement market is facing many challenges. The most challenging among these is the stringent environment regulations and growing emphasis on sustainability. As cement production is one of the most energy-intensive process resulting in more emission and burden to the economic viability of the industry. In order to combat the growing emission-related concerns, the cement players are adopting technology upgradations to bring down the emission level and make the cement production process and the product greener and economical. Adoption of green cement and sustainable construction practices are growing in the country. In spite of the consumers looking for replacing cement with eco-friendly materials, the demand for cement is here to stay considering its availability and transformation in quality and sustainability in the current market scenario.
Steel: For a sustainable future
The steel is an essential material to vital industries including construction, infrastructure, automotive, engineering, and defence. In recent years, the steel industry has witnessed remarkable growth, with India rising to become a major global player in steel production. Today, India stands as the world’s second-largest producer of steel. India was the 2nd largest producer of crude steel with an output of 140.17 mt in 2023, showing a yoy growth of 11.8%. The country accounted for 7.6% of world crude steel production during the year. This growth underscores the country's significant role in shaping global steel markets and supporting industrial advancements worldwide.
The performance of the steel sector during April-June 2025 has surpassed the levels for this period in any fiscal year. In the first quarter of FY25, crude steel production reached 36.61 million tonnes (MT), finished steel production clocked 35.77 MT, and finished steel consumption hit 35.42 MT.
In June 2024, crude steel production increased by 0.3 % from 12.22 million tonnes in May 2024 to 12.26 million tonnes in June 2024.
Finished steel production increased by 1.2 % from 11.92 million tonnes in May to 12.06 million tonnes in June. However, the consumption of steel has seen a marginal decrease of 1.0% from 12.13 million tonnes in May 2024 to 12.01 million tonnes in June 2024.
The application of steel in construction has transformed and revolutionised with a host of new application areas emerging for steel in the sector. Steel has proven valuable in various construction applications, from tall buildings to large bridges. Its exceptional strength and durability makes steel as the preferred material in construction. Since steel has a high tensile strength, it can withstand heavy loads and forces without deforming or collapsing. This inherent strength allows for the construction of tall buildings and long-span structures, providing stability and safety. Steel is highly resistant to environmental factors such as corrosion, fire, and pests, ensuring the structure’s longevity. Steel offers wider options of designs, enabling architects and designers to create innovative and striking structures. Its high strength-to-weight ratio allows for constructing lightweight yet robust frameworks, reducing the need for excessive supporting elements. Steel construction is faster compared to other construction methods due to ease of assembly. Steel components are prefabricated off-site, allowing for faster construction timelines. With growing environmental concerns, sustainability has become a key consideration in construction. Steel is a highly sustainable material that can be recycled repeatedly without losing its properties. This recyclability significantly reduces the demand for virgin steel production and minimises waste generation. Steel's strength and reliability make it a safe choice for construction projects. Steel structures are engineered to withstand extreme weather conditions, seismic activities, and other external forces, ensuring the safety of occupants. Because of all these reasons, PEB structures are gaining momentum especially in industrial and commercial buildings.
Over the years, the steel sector has experienced remarkable growth, marked by substantial increases in both production and consumption. Per capita consumption of steel has risen from 59 kg in 2013-14 to 119 kg in 2022-23. In 2023, India produced 140.2 million tonnes of steel, positioning itself as the world's second-largest steel producer.
Looking ahead, the National Steel Policy (NSP) projects significant expansion in the sector. By the year 2030-31, India is expected to achieve a total crude steel capacity of 300 million tonnes, with crude steel production reaching 255 million tonnes and finished steel production at 230 million tonnes. This growth trajectory highlights the steel sector's crucial role in supporting the country's infrastructure and economic development.
Positive outlook
The growing construction sector is boosting demand for building and construction materials across India, leading to increased capacity utilization for the manufacturers. Cement players are focusing on enhancing their production capabilities to meet the increasing demand, while also integrating sustainable practices into operations. The consumption of steel in construction is going to see further growth due to the wider application scopes in the upcoming projects of roads, railways, bridges, airports, urban infrastructure and industrial & warehousing projects.
