India Biannual Construction Market Report Q3/Q4 FY26
Executive summary
The Indian construction sector entered the second half of the fiscal year 2026 (Q3/Q4 FY26) on a trajectory of moderated yet sustained growth. While the first half of the year reflected a positive outlook, recent downward revisions to industry forecasts necessitate a more strategic and measured approach.
This recalibration is largely a consequence of project-specific headwinds, rather than a systemic economic deceleration. The domestic market retains its inherent strength; however, evolving cost dynamics from global uncertainties, including persistent trade tensions and oversupply in key commodity markets, signal a period of controlled growth.
Strikingly, the traditional emphasis on managing material costs has shifted. While commodity prices like steel and cement are expected to rebound from recent lows, the primary inflationary pressures are now rooted in non-material factors. These include rising labour costs and significant green policy shifts, such as the implementation of CEV Stage-V emission norms for construction equipment. The sustained challenge of a skilled labour shortage, coupled with the seasonal post-monsoon surge in activity, will continue to exert upward pressure on wages and overall project costs.
In response, technology is replacing as a valuble strategic imperative. For executive leadership, navigating the upcoming quarters with resilience and profitability will require a tripartite strategy: proactive risk management, a strategic pivot from cost to value, and clear financial discipline that prioritises sustainable growth and operational excellence.
With this note, I am pleased to present our biannual publication. It offers a comprehensive review of current market trends, a detailed analysis of cost dynamics, and insights from our market survey that reflect the on-ground realities of the construction industry.
Siva Senathipathy
Bangalore, India
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