Natural stone exports set to drop 15% in FY14

Restrictive policies by state and central governments, curbs on import of rough granite blocks affecting the industry

Natural stone (mainly granite, marble and sandstone) exports are set to decline 10-15 per cent for the current financial year ending March, as a large number of quarries and processing units have shut due to the shortage of raw material. Exports are expected to go below Rs 8,000 crore compared to Rs 9,000 crore a year ago.

“Due to the enforcement of strict environmental laws in several states, the existing granite quarry licences have not been renewed. One of the large processing and export units in Madurai shut shop recently. The granite and marble sector is facing several restrictions from the Central and state governments,” said J B Surana, president, All India Granites and Stone Association (AIGSA).

He said an inordinate delay in the grant of quarry leases, lack of transparency and investor-unfriendly policies of the state governments had led to a drastic reduction in exports. The sector was facing an acute shortage of raw material, he said.

“The Directorate General of Foreign Trade (DGFT) has fixed the marble import quota at 600,000 tonnes a year against the sector’s demand of 1.5 million a year. It has also restricted the import of granites. Not many licences have been granted by states in the recent years. The Karnataka government has not issued a single granite quarry licence in a decade.”

Karnataka’s share in granite exports declined to 16 per cent of the total exports at Rs 1,500 crore a year ago from a high of 60 per cent 15 years ago.

“The pause in quarrying due to declaration of eco-sensitive zones around national parks and wildlife sanctuaries, declaration of revenue land as reserve forest, non-renewals of leases, delay in granting fresh leases and a restrictive export import policy have contributed to the shortage of raw material.”

He said the government should bring the import of marble and granite under the Open General Licence (OGL) regime and remove restrictions in the quantity of marble imports. Presently, only 600 licence holders are getting the benefit of marble imports whereas 20,000 processing units function without sufficient quantity of the raw material. The AIGSA has demanded the government to declare granite as a “major mineral” and allow the DTA (domestic tariff area) sale of marble slabs to 100 per cent export-oriented units. The government should also restrict the import of finished goods from countries like China, which is dumping huge quantities, it said.

“If we permit the import of finished goods the country loses $60 a square metre, whereas if we import rough dimensional blocks, we have to pay $23 a square metre. To improve the current account deficit, it is necessary to permit the import of rough blocks than permitting the import of finished goods under OGL.”