India Biannual Construction Market Report 1Q/2Q FY26
Executive summary
In the post-election world, with almost all the major economies undergoing a leadership change and the predominant ones sailing the economic turmoil, India has performed relatively well.
After experiencing an unprecedented series of shocks, the global economy is appearing to stabilise by reordering policy priorities and looking out for underwhelmed growth rates. Thankfully for India, the prospect is more stable, supported by private consumption, particularly in Tier 2 and 3 cities.
The construction sector is even better positioned at a bright spot in terms of growth, reflecting strong infrastructure and housing activity. Industry forecasts see the construction income rising 8–10% in FY26 – driven by a healthy order book and low base effects.
On the cost side, the pressures are stabilising with input inflation expected to be 3–5% in FY26. Imported raw material prices have considerably eased from late 2024, though domestic labour and regulatory costs are up. The industry is dynamically diversifying its procurement channels and embracing technology to offset labour constraints and to boost productivity.
While resilience and adaptability are the current key focus, a well thought out balance between caution and opportunity will be the path ahead. For stakeholders, the message is clear: pursue growth but hedge sensibly, invest in efficiency, and stay agile amid uncertainty. The result should be stable, measured progress in another challenging year. With this posture and perspective, I am pleased to present our biannual publication, offering a comprehensive review of current market trends and detailed cost dynamics analysis supported by a market survey providing insights into the realities of the construction industry.
I believe this publication will instil confidence and enthusiasm regarding India’s growth trajectory and serve as a valuable resource for stakeholders seeking up-to-date information and insights on market trends within the built environment.
Siva Senathipathy
Bangalore, India
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