Ineffective Project management strategies are leading to time and cost related crisis in construction projects. The aim of this study is to examine and identify factors that cause cost overrun in commercial construction projects. In this study Relative Importance Index (RII) is used to determine importance of factors causing cost overrun. A questionnaire with 14 factors, identified from the review of published research papers on cost overruns, was floated to respondents involved in commercial projects dealing with cost overruns .The major factors causing cost overrun in commercial construction projects were identified and ranked by application of Relative Importance Index (RII) method and conclusions were drawn from the findings of the study. It is observed that the factors namely poor site management, ineffective scheduling, inexperience of contractor, lack of communication between parties and inappropriate contract duration are most significant factors for construction cost overrun in Indian commercial projects.