Natural Stone Industry Stuck by policy paralysis
India is the treasure trove of the stone deposit in the world. It probably has the largest reserves of granites and natural stones in the world. The country accounts for about 20 per cent of the total world reserves in granites, marbles, sand stone, slate and others. The Indian stone industry is spread throughout the length and breadth of the country. The journey of the processing industry started with circular saw machines and from there to Gangsaw and the latest one being circular wire saw machines. Latest resin lines, polishing lines etc. are being used for making the products of international standards. Even in the mining sector, now diamond wires are being used, dispensing the traditional blasting method, which is environmental friendly. There are more than 20,000 units working all over India with a huge investment of more than Rs 50,000 crore and providing job opportunities to more than 15 lakh persons. But, the stone industry is facing many obstacles.
The policy paralysis in the government has affected the growth of the industry which has become a major hurdle in the development of the stone industry. Stone industry still comes under the minor minerals in spite of huge investment in the field of processing and mining industry. Over a period of time, there is a boom in the construction activity in India and across the globe. The stone has found place in various applications such as construction, interior decoration, monument and memorials artifacts and garden items. The mining industry could not keep up the pace with the development of the processing industry.
There is a huge shortage of raw material for the industry, due to which the prices of the granite/stone blocks, are increasing day by day. No new lease are being granted by the government in such areas as reserve forest, tiger reserve, wild life sanctuary, national parks, Western Ghats, Aravali region etc and because of this the industry is facing many problems. Government did not makeany effort for providing relief to the processing industry in the last decade. The new ‘EXIM’ policy has also hampered the stone industry. There are three major notifications which have been issued by the Director General of Foreign Trade (DGFT), No. 36, 37 and 38 of the ‘EXIM’ policy, which rattled the stone industry.
These notifications are protecting the interests of license holders rather than protecting the interest of the industry. All India Granites and Stone Association (AIGSA) has been requesting the Government of India and DGFT for the last four years, to amend the policy to allow import of granite and marble blocks under OGL scheme for the survival of the industry, which faces severe shortage of rough dimensional blocks for value addition.
All India Granites and Stone Association (AIGSA) is an association formed in 1983 to take note of the potential of the natural stone industry domestically and internally to promote the natural stones of India.
The sole objective of the association is to promote stones of India across the globe and also to resolve many domestic problems faced by the mining industry. The mining industry which was an unorganised sector faced many problems and challenges which engendered the hurdles for the growth of the industry. AIGSA is having membership from all the sectors of the natural stones industry of India either it is from granite, marble, sandstone quartzite, or from machinery, abrasives, tools. All the segment of the industry directly and indirectly connected with the natural stone industry from all over India are its members. AIGSA has played a significant role in framing the Granite Conservation and Development Rules (GCDR-1999) by Ministry of Mines, Government of India for promotion of granite industry in country.
Effect of China on Indian stone industry
Although India has an advantage over China of over 10 years in the stone industry as the Chinese started their stone business a decade ago, due to restrictive policy followed by the Government of India on import of rough dimensional blocks, our total export is still at $159 million. here it is noteworthy that Chinese total export stands at $2,300 million. This gap is widening and to counter this, level playing field has to be created for the Indian stone industry so as to complete with China in the international market.
The lacuna in the EXIM policy has given advantage to the Chinese and large quantities of the Indian granites blocks are being exported to China. After value addition, China exports the finished goods to different parts of the world which created the competition for the Indian industries. If this situation continues, days are not far away when the entire Indian stone market will be controlled by only Chinese finished goods.
FDI investment in stone industry
India has opened the doors for the foreign investment through FDI scheme, which includes all the sectors. But there is still no overseas investments coming to natural stone field because of the policy paralysis. The current policy doesn’t allow free import of raw material and there is a shortage of raw material from the domestic mining sectors. Once the mining policy is made more industry-friendly and import of granite and marble is brought under OGL, there will definitely be inflow of FDI in stone sectors in coming days.
Against this backdrop, AIGSA is playing a very important role in bringing out the weakness of the present ‘EXIM’ policy. The association has recommended some very crucial points to the government which are as follows:
Create ‘mineral zone’ where the natural resources are available. In this ‘mineral zone’, the mining activity should be allowed freely without the interference of the other departments like revenue, forest, ecology, wild life, environment etc so that the entrepreneur can work peacefully and raw material will be available to the processing industry. By this the growth will increase rapidly. Granite has to be declared a major mineral instead of minor mineral. The import of granite and marble blocks should be brought under OGL scheme so that sufficient quantity of the raw material is available to the industy. Import of finished products to be restricted by fixing the floor price to protect the domestic units. Import should not be allowed by those who have invested in mining sector abroad. 100 per cent marble EOU should be allowed on DTA sale.
The present ‘EXIM’ policy which is only helping China and causing damage to the Indian stone industry needs a thorough revision. If the government comes out with a new industry-friendly policy which overcomes the present ‘EXIM’ policy weakness, then it will make a rapid growth for the stone industry in coming days.
By Nilabh Krishna