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India鈥檚 cement sector is expected to post a healthy 6.5鈥�7.5% demand growth in fiscal 2026, buoyed by higher government infrastructure spending and an anticipated boost in rural housing. This uptick follows a moderate 4.5鈥�5.5% growth seen in FY25, which was impacted by a sluggish start due to general elections, a well-distributed monsoon slowing construction, and a high base from previous years. Weak spending by state governments and a slow real estate market further dragged growth. Infrastructure, contributing 29鈥�31% to India鈥檚 cement demand, remains a key driver. The Centre鈥檚 10% rise in budgetary allocations for core infrastructure ministries, alongside an 11% rise in spending by 12 key states鈥攖ogether accounting for nearly two-thirds of the country's cement demand鈥攚ill significantly boost sector performance. Sehul Bhatt, Director at Crisil Intelligence, highlighted growing investment in rail corridors for energy, minerals, and cement, and tourism-focused development as additional triggers. 鈥淚nfrastructure-led demand alone is projected to rise 7.5鈥�8.5% this fiscal,鈥� he said. Rural housing to lead Rural housing is expected to continue dominating cement consumption with a 32鈥�34% share. Above-normal monsoon predictions and rising agricultural income are expected to drive this trend. Central schemes like PMGSY and MNREGA, backed by increased allocations, are also set to support rural construction demand. The report adds that implementation under Pradhan Mantri Awas Yojana 鈥� Gramin is likely to accelerate, with a greater number of sanctioned and under-construction homes. Average rural wages, which grew 25% in FY25, are expected to stay strong, boosting spending power in rural areas. Urban and industrial rebound Urban housing, which struggled last year due to a sluggish real estate market, is poised for a rebound in FY26, aided by a lower base, potential interest rate cuts, and faster execution under PMAY鈥揢rban. Notably, the scheme saw a 45% budget increase this year. Meanwhile, the industrial and commercial segment, accounting for 13鈥�15% of cement demand, is set for steady growth led by warehousing and commercial real estate revival. After three years of strong growth, this segment had slowed in FY25 due to a dip in private capex. Sachidanand Choubey, Associate Director, Crisil Intelligence, noted, 鈥淚ncreased capex in infra and housing ministries is likely to lift demand across segments. After two years of subdued prices, a 2鈥�4% price hike is expected in FY26 as companies focus on better margins despite competitive pressures.鈥� The overall outlook points to a cement demand surge fueled by robust infrastructure projects and a strong rural push鈥攖ranslating to long-term gains for the industry.