Construction Industry in India: Statistics on Output, Costs, Cement, Steel and Labour (2026)

How big is India's construction industry?

Construction added ₹26,55,075 crore of gross value to India's economy in 2025-26 at current prices, according to MoSPI's provisional estimates released on 5 June 2026. That is 8.4% of total GVA of ₹3,14,86,840 crore. At constant 2022-23 prices the sector grew 7.4%, a little slower than the economy's 7.9%, after 7.3% in 2024-25 and 9.9% in 2023-24.

Quarterly figures show the sector picking up through the year. Real construction growth was 5.3% in April to June 2025, 8.9% in July to September, 6.7% in October to December and 8.4% in January to March 2026. In the detailed 2024-25 accounts, construction's share of GVA was 8.5%, behind only real estate and professional services, agriculture and manufacturing, and roughly level with trade, hotels and restaurants.

The numbers include everything built in India: homes and offices, but also highways, railways, metro lines and power plants. That mix matters because public infrastructure spending has risen fast; Knight Frank's compilation of budget data shows gross infrastructure capex rising from ₹765 billion in FY15 to ₹6.6 trillion in FY25, with ₹6.7 trillion budgeted for FY27.

Cement and steel: what the official indicators show

The two materials that track building activity most closely both grew faster than the sector's value added. MoSPI's indicator annex shows the Cement Production Index rose 8.7% in 2025-26 and finished steel consumption rose 8.0%. In January to March 2026, cement grew 8.2% and steel consumption 10.4%, consistent with strong year-end construction.

Prices of these materials have not been the main cost problem recently. Colliers reported in November 2024 that average cement prices had fallen 15% over twelve months and steel had dipped 1%, while copper rose 19% and aluminium 5%. Turner & Townsend's March 2026 note also says steel and cement prices softened, though delivery reliability remained a concern.

Bank lending points the same way. RBI's sectoral credit release for August 2026 lists 'construction' among the industries showing buoyant year-on-year credit growth, alongside infrastructure and basic metals, within overall industrial credit growth of 18.2%. Credit to commercial real estate was also cited as a driver of services lending, which grew 24.3%. Easy bank finance for contractors and developers tends to show up in construction output a few quarters later.

How much does construction cost per sq ft in India?

For residential projects, Colliers India puts the average cost of construction at ₹2,800 to ₹2,850 per sq ft in March 2025, up from ₹2,000 in October 2020. Its yearly series for a Grade A, 15-storey residential building in tier 1 cities runs ₹2,200 (October 2021), ₹2,300 (2022), ₹2,500 (2023) and ₹2,780 (October 2024). The 11% jump in the year to October 2024 was driven by a 25% rise in labour cost.

Colliers breaks the cost down as roughly 67% materials (cement, metals, sand, bricks, wood), 28% labour and 5% fuel. Construction itself is around 40% of a typical project's cost, with land at 20% to 30%, according to the same Business Standard report.

Internationally, India remains cheap. Turner & Townsend's Global Construction Market Intelligence 2026 puts Mumbai at US$667 per m², against US$7,938 in New York, the world's most expensive market. In Gurgaon, the district's official collector rate list for 2026-27 uses ₹1,900 per sq ft as the cost of construction in licensed colonies and HUDA sectors, up from ₹1,700; this is a valuation figure for stamp duty, not what a premium developer actually spends.

Is construction cost inflation slowing in 2026?

For general building work, yes. Turner & Townsend said in March 2026 that greenfield cost escalation had eased to around 2% to 4%, but that wage inflation of 10% to 15% is now commonly built into budgets, and labour availability is a persistent problem in Delhi NCR, Bengaluru, Hyderabad and Chennai.

The August 2026 update was more cautious. It reported cost escalation of 10% to 15% where imported raw materials are involved, two to four weeks longer lead times for imported equipment, and noted that domestic steel and cement supplies had kept the rest of the cost base fairly stable. For homebuyers, the takeaway is that the price pressure in new launches today comes more from land and labour than from cement or steel.

How many people work in construction, and what are they paid?

Construction employed 12.0% of India's workers in 2025, according to the Periodic Labour Force Survey, down slightly from 12.3% in 2024. It is level with manufacturing (12.1%) and second only to agriculture (43.0%) as a single industry.

The industry is short of people at the skilled end. Across 71 projects Turner & Townsend reviewed in H1 2026, average labour shortages were 30% to 35%, with the worst gaps among MEP engineers, BIM specialists, commissioning teams and finishing trades. Reduced migration of skilled workers from the north has added pressure in South India.

Wages are set by states. Haryana, which covers Gurgaon sites, revised minimum wages from 1 April 2026 to ₹15,220.71 a month for unskilled workers, ₹16,780.74 for semi-skilled, ₹18,500.81 for skilled and ₹19,425.85 for highly skilled, applying to contract labour as well.

What this means for property buyers in Gurgaon

Construction cost is now a smaller part of a Gurgaon apartment's price than many buyers think. Take Colliers' ₹2,800 per sq ft and set it against a premium project selling at, say, ₹20,000 per sq ft: building accounts for about a seventh of the price; land, approvals, finance and developer margin make up most of the rest. That is why prices in Gurgaon move with land values and demand far more than with cement or steel prices.

The real construction risk for buyers is delivery, not cost. With labour shortages of 30% or more on large projects, timelines slip first. Before booking an under-construction home, check the developer's delivery record and the RERA completion date, and read our separate breakdown of construction cost per sq ft in Gurgaon.