Cement makers expect GST cut to boost sector, accelerate infra growth

New Delhi, Sep 4 (PTI) The GST rate reduction on cement will not only support domestic manufacturers but also accelerate the pace of infrastructure development and catalyse industrial expansion in India, industry players said on Thursday.

The move is also expected to lower cement prices by Rs 25-30 per 50 kg bag, according to analysts.

A reduction in GST is likely to enhance the competitiveness of the Indian cement industry by creating a level playing field with global peers, said the Cement Manufacturers' Association (CMA).

"For a long time, cement has been taxed at one of the highest rates among essential building materials compared to sectors, such as steel and several other construction input materials.

"Lowering the rate to 18 per cent corrects this long-standing anomaly and ensures parity with other core materials," CMA President Neeraj Akhoury said.

The GST Council on Wednesday approved the reduction of GST on cement from 28 per cent to 18 per cent.

Welcoming the development, Akhoury, who is also Managing Director, Shree Cement, said cement is a foundational input material for infrastructure and housing, and the move will likely boost consumption, augmenting considerable infrastructure, including affordable housing.

Adani Cement, which owns Ambuja Cements and ACC, said a reduction in duty on cement will accelerate the nation's infrastructure pipeline, catalyse industrial expansion, and strengthen India's march towards a multi-trillion-dollar economy.

"This reform is more than a tax rationalisation. It is a signal of confidence, momentum, and purpose, ensuring that India's next era of growth is built on a foundation that is stronger, smarter, and sustainable," Adani Cement CEO Vinod Bahety said.

A progressive policy for cement is therefore a direct investment in India's future, he asserted.

"This move further strengthens our resolve to scale capacity, deliver premium and sustainable solutions backed by world-class R&D, and energise the infrastructure that underpins India's growth story," said Bahety.

Dalmia Bharat CFO Dharmender Tuteja said, "Reduced prices of cement and higher purchasing power, especially increase the affordability of housing for middle- and lower-income groups, spurring the demand for cement. Reduced prices also improve the affordability of premium categories of cement, leading to a likely shift of demand towards these categories".

JM Financial Institutional Securities said the reduction in GST to 18 per cent is expected to lower cement prices by Rs 25-30/bag.

In the near term, the benefit will need to be passed on to customers, it added.

The all-India average cement price in June 2025 was Rs 355 per 50 kg bag.

According to Grant Thornton Bharat Partner and Tax Controversy Management Leader Manoj Mishra, it is a significant structural relief for the real estate sector.

"Construction materials account for roughly 30-35 per cent of total project costs in affordable housing, with cement being one of the most cost-intensive components. For developers, this reduction eases working capital pressure in a labour-intensive sector with tight margins, and supports better project viability and timely execution," he said.

According to the CMA data, the Indian cement industry has a total installed capacity of nearly 700 million tonnes per annum (MTPA).

The industry has been witnessing a phase of consolidation with the Aditya Birla group firm UltraTech, which has over 200 MTPA capacity, and Adani group firm Adani Cement, with over 100 MTPA, acquiring small companies.

The industry expects 7-8 per cent growth in the current fiscal, helped by the government's spending on infrastructure and rural housing, having endured a slowdown in FY25. PTI KRH RKL BAL BAL