Rising costs hit construction sector amid global tensions
Tirupati: Escalating tensions in the Middle East have triggered a sharp increase in construction costs in India, with prices of steel, cement and other essential materials rising significantly in recent weeks. The surge is placing heavy financial pressure on builders and threatening to delay housing projects at a time when construction activity typically accelerates.
The ongoing US–Israel–Iran conflict has disrupted global supply chains and driven up fuel prices, creating a ripple effect across industries dependent on imported raw materials. The construction sector, which relies heavily on stable material costs and timely supply, has emerged as one of the worst affected, with developers and individual home builders struggling to manage escalating expenses.
The impact has come during the peak construction season. With the onset of summer, housing activity usually gathers pace as families begin building homes in urban and semi-urban areas. This year, however, rising costs have forced many middle-class families to reconsider or postpone construction plans due to mounting budget pressures.
Prices of core construction materials have witnessed sharp increases. Steel and cement, the backbone of building activity, have become significantly costlier, pushing up overall project estimates. In addition, prices of aluminium, glass, PVC pipes and electrical materials have risen, while several items are facing supply shortages. Supporting infrastructure components used in wastewater systems and water pipelines have also become more expensive. Labour wages in the construction sector have increased from this month at several places, further adding to the financial burden.
Former president of the CREDAI Tirupati chapter V Srinivas told The Hans India that rising raw material and fuel costs have substantially increased construction expenditure.
Steel prices, which earlier ranged between Rs 57,000 and Rs 58,000 per tonne, have now climbed close to Rs 65,000, while cement prices have increased by Rs 50 to Rs 60 per bag.
He noted that builders are facing severe financial stress as many projects must be completed at previously agreed contract prices, leaving limited scope to transfer additional costs to buyers. As a result, both builders and home buyers are bearing the impact.
Supply disruptions have further worsened the situation.
Tile manufacturing units in Morbi, Gujarat, one of India’s major tile production hubs, have remained closed for over a month after workers left the region, resembling conditions seen during the Covid-19 lockdown.
Although reopening is expected around mid-April, industry sources believe operations may resume only by May. Builders who paid advances for tiles are now waiting for supplies, slowing progress across several projects. Industry representatives estimate that overall construction costs have increased by more than 20 per cent due to rising material prices, higher labour charges and global uncertainties. CREDAI state leaders have urged the government to provide relief measures such as reduction in stamp duty and tax concessions to ease pressure on the sector. However, it remains uncertain how quickly such support will materialise.
