India’s tax cut on construction materials could be a “game-changer”

Skyscrapers under construction in Mumbai, India. Image: Adobe Stock

The GST Council is a constitutional body responsible for making recommendations on issues related to the implementation of the Goods and Services Tax in India.

The new tax rate for critical construction materials such as cement and steel have been dropped from 28% to 18%. Granite, marble and travertine blocks, the uncut versions, have also come down significantly, from 12% to 5% leading to hopes of reduced costs for home builders.

Mr. Nagendra Nath Sinha, MD, Rodic Digital & Advisory, said that the reduction of GST was a “game-changer for India’s infrastructure sectors.”

He added that, “With cement and steel forming nearly 40–45% of project costs, this change will cut material tax burden by about 10% and help in saving nearly ₹10 lakh on every ₹1 crore spent. Such savings will make projects more viable, accelerate execution, and boost participation in Public-Private Partnerships. The real estate sector, especially affordable housing, will also benefit as developers pass on cost efficiencies to consumers.”

At the start of August US President Donald Trump issued an executive order hitting India with an additional 25% tariff over its purchases of Russian oil. This will raise the total tariff on Indian imports to the United States to 50% – among the highest rates imposed by the US.