Cement demand in India is likely to grow about 4.5 per cent in 2018-19 on the back of a pick-up in the housing segment, and a higher infrastructure spend, rating agency ICRA said today. Domestic cement production during April-December 2017-18 stood at 216.5 million tonnes (mt), higher by 2.7 per cent compared to 210.8 mt during the same period of the previous financial year.

For the ongoing fiscal, ICRA said, demand is expected to grow around 3 per cent based on current trends as in December 2017, production increased 8.4 per cent month-on-month to 26.3 mt. "This demand growth is bolstered by a pick-up in the housing segment — primarily affordable housing, rural housing and higher infrastructure spend," ICRA Senior VP and Group Head Sabyasachi Majumdar said.

He further said improved rural incomes, higher rural credit and increased allocation for rural, agriculture and allied sectors are likely to boost rural housing demand. While April-June saw a decline in production due to local issues across regions such as sand shortage, implementation of the Real Estate Regulatory Authority (RERA) Act and drought, the second quarter saw a decline on the back of GST transitional issues, below average monsoon and continued sand unavailability, the agency noted.

However, in the December quarter, output increased 11.6 per cent to 75.6 mt supported by demand in Andhra Pradesh, Telangana, the eastern (except Bihar) and western markets.