Management Discussions and analysis forming part of Director's Report: Indian Stone Industry, Structure and Developments: Nowdays the domestic marble is facing direct completion from domestic vitrified tiles. The prices difference among both the product is very thin. But ready to use feature and laying and fixing cost provided the advantage to the tiles over marbles. Hence, in metros the focus of consumers has shifted from domestic marble to imported marble. India meets a bulk of its rough marble requirements through imports as domestic demand is pegged at 4.8 crore MT (metric tonne) while the domestic supply is capped at 1.16 crore MT. The country's marble industry is concentrated in states like Rajasthan and Gujarat. Whereas the China has granite quarries, but imports a huge quantity of granite blocks for value addition. Its imports of rough dimensional blocks totalled $2,300 million and its exports of value-added products totalled $4,134 million. India has a ten-decade advantage over China but its exports still total $159 million; and that is mainly because of the restrictive policy adopted by the Indian government on import of rough dimensional blocks. China's export of natural stone is 26 times more than that of India - and that has happened because of the restricted import policy on rough dimensional blocks. The gap is widening and a level playing field has to be created for the Indian stone industry to compete with China on the international market. The lacuna in the Exim policy has given an advantage to China, and a large quantity of Indian raw blocks is being exported to China. After value addition, China exports the finished goods to different parts of the world; which creates unwanted competition for the Indian industry. Chinese finished products (slabs and tiles), which are being imported to India under the OGL scheme with value cap, are posing tough competition for the Indian domestic processing industry. Factors effecting demand and supply of atona industry: Present state of economy is not good as far as building and construction industry is concerned. And the same is not going to take any sea changes in the ensuing period. Indian construction industry, particularly building construction is directly affecting the demand and supply of marble and allied stone industry. This, slowdown in the demand directly effects the demand of marble and allied stone also. In addition to slow construction demand there is a cut in the land prices also. Sharp cut in the land price will provide comfort to the new building construction, but at the time, the projects are stuck up due to sliding land prices. More and more people are expecting more correction in the land as well as constructed flats prices. In anticipation of slide in prices, they have stopped the transactions which ultimately block the funds in the middle of the projects. Hence, rotation of funds flow dried up. In addition to that, bankers are not putting more money into the sectors because of bad experience with the sectors. Hence, demand in the sectors is deeply reduced. Impact of Government Policy on the Industry: The Indian stone industry is facing many obstacles. Policy paralysis has adversely affected the growth of the industry. Stone industry has not been recognized by the central and state governments and is not finding any place in both the central and state budgets. Various encouraging packages and assistance have been given to other industries; for example, the textile and sugar industries. But the government does not give enough attention to stone industry. The Indian stone industry still comes under 'minor minerals' in spite of the huge investments made in the field of processing and mining. Industry have not been treated at par with sand mining and crushers used for road making! All this has slowed down the growth of the industry. |