The cement and steel industries are set to benefit from the Union Budget 2026–27’s combined emphasis on infrastructure expansion and green industrial transition, providing long-term demand visibility for core construction materials.
The increase in public capital expenditure to Rs 12.2 lakh crore is expected to translate into sustained demand for cement and steel across roads, railways, urban infrastructure, industrial corridors and logistics projects. The continued focus on infrastructure development in Tier-II and Tier-III cities, particularly urban centres with populations above five lakh, is expected to broaden the geographic spread of construction activity.
At the same time, the Rs 20,000 crore allocation for Carbon Capture, Utilisation and Storage (CCUS) directly targets emissions-intensive industries such as cement and steel, enabling adoption of cleaner technologies without constraining production capacity. The initiative marks a significant step towards aligning industrial growth with India’s long-term decarbonisation goals.
Additional support through duty exemptions on capital goods used for energy infrastructure and critical mineral processing is expected to lower input costs and support capacity expansion across core materials industries.
Commenting on the Budget’s direction, Arun Shukla, President and Director, JK Lakshmi Cement, said, “The Union Budget remains true to the Government’s Viksit Bharat and 2070 Net Zero vision and sends a clear signal on the direction of India’s growth—combining infrastructure-led development with a sharper focus on sustainability.” He added that “the emphasis on Carbon Capture and Utilisation reflects an important step towards enabling cleaner industrial growth.”
Highlighting the regional demand impact, Shukla noted that “the focus on developing infrastructure in cities with populations above five lakh will strengthen Tier 2 and Tier 3 cities as emerging growth centres,” adding that “together, these measures support balanced regional development and provide long-term visibility for industries linked to construction and infrastructure.”
Echoing the positive outlook, Dilip Oommen, CEO, AM/NS India, said, “The continued outlay on capex for infrastructure is a welcome step to support industry’s long-term growth.” He added that “measures to strengthen project financing, revive industrial clusters and expand infrastructure in Tier-2 and Tier-3 cities will also boost domestic manufacturing and competitiveness.”
The Budget’s dual focus on capex-led growth and green technology adoption is expected to reinforce confidence across cement and steel producers, while supporting sustainable expansion of India’s infrastructure and manufacturing base.