Shortage of raw material and restrictive Exim policy hampers the growth of granite and marble processing units
Under Chapter 25 of the Exim policy, the import of marble blocks is not allowed and this restriction has put marble processing units, which are mainly in the small and medium category, in trouble. The insufficient domestic availability of marble blocks has forced these units to rely on marble imported by selected licence holders.
However, under Chapter 68 of the Exim Policy, the import of finished goods is permitted with a floor price of $450 (Rs 20,180). “Using this clause, Chinese producers are dumping finished marble products in India, causing huge losses to the domestic industry,” J B Surana, president of the All India Granites & Stone Association (AIGSA), said.
He said the restrictive policy benefited China rather than units in India. The maximum number of licence quota is awarded by the ministry of commerce and the director general of foreign trade (DGFT) to a “strong lobby” of marble quarry owners and industry from Rajasthan, he said. “Even in Rajasthan, only 162 of the 3,000 units enjoy the licence quota system,” he added.
Currently, the demand for natural stone (including granite and marble) in India is one million tonnes, but only 300,000 tonnes are available from domestic sources. The shortfall is met through the import of finished blocks from China and vitrified tiles and artificial stones from other sources.
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“The restrictive policy adopted by the commerce ministry benefits only 162 units that are allowed to import marble blocks. These units trade their licences illegally in the black market at Rs 10,000 per tonne. There is a strong lobby of selected licence holders who impress upon the ministry the need to restrict the imports of rough marble blocks,” Surana said.
At present, India imports around 300 containers of finished marble from China. This marble is sold for Rs 300-500 per sq ft.
“Our demand is to free the import of dimensional blocks to help the growth of the industry and meet the shortage of raw material faced by around 1,800 processing units. By restricting the import of dimensional blocks the government of India has enabled China to make India a dumping ground for its finished goods,” Surana said.
The AIGSA, Surana said, had urged the ministry of finance to incorporate in the Union Budget an extension of the 100 per cent export-oriented unit scheme and increase the Central Excise limit from Rs 1.5 crore to Rs 5 crore for small scale industries. “Both our requests have not been considered,” he said.
“If we are allowed to import under the open general licence (OGL), we can reduce prices by half, and also generate huge employment and earn foreign exchange by exporting to world markets,” he added.
The export of natural stone, including granite, is currently estimated at Rs 6,000 crore and growing at 15 per cent annually. The total size of the domestic trade is estimated at Rs 15,000 crore.
If the government does not free up imports, Indian processing units will have to buy rough dimensional blocks from other countries, process them in China and import the finished goods, and also export to the rest of the world from China. “In this way, China will become the major beneficiary of government’s wrong policy structure,” said S Krishna Prasad, general secretary of AIGSA.
Due to the low cost of transportation by ship, Chinese stone processing units are taking away more than 40 per cent of Indian rough blocks to their country and giving tough competition to the Indian industry. “If we have to compete with Italy and China, we have to bring about drastic changes in our policy with immediate effect,” he added.