Granite industry bats for Open General Licence

At present, the Indian granite industry is exporting about Rs 12,000 crore worth of granite, out of which, around 80% is in the form of value-added products.

Even the domestic business is valued at Rs 12,000 crore. The total turnover of the granite industry is pegged at Rs 24,000 crore. It has the potential to generate lakhs of semi-skilled employment in rural areas, as quarrying takes place only in small towns.

Federation of Indian Granite and Stone Industry (FIGSI), having 1,215 members, is in the process of establishing an R&D and training centre for the benefit of the Indian natural stone industry, and as a first step, has already purchased an area of about 32 acres near Hosur. In an interaction with DH’s Umesh M Avvannavar, FIGSI President R Sekar shared the market opportunities and challenges faced by the industry.

What are the market opportunities for the granite industry?

India has developed a new state-of-the-art technology in processing, and our products are well-accepted all over the world. At present, there is an acute shortage of raw materials due to the non-issue of fresh quarry leases, and also non-renewal of old leases. Imports of granite blocks are kept under negative list.

If the supply position of the raw material is improved, then definitely the export of value-added finished products can grow two-folds, which will create job opportunities to additional 10-15 lakh people.

Where does India stand in exports?

India stands in the fourth position after Brazil, China and Italy. Our major export markets are the US, China and Europe. Now, we are also exporting to the Middle East, Far East, and Russia, among others. The export of granite for the year 2014-15 (Rs 9,000 crore), 2015-16 (Rs 12,000 crore) and for 2016-17 (Rs 14,000 crore projected). USA is the largest consumer of granite in the world. India exports products to over 90 countries, while it imports from other countries for value addition and re-export.

How do you see the growth of the export market?

In spite of recession in Europe and the US, the demand for granite is increasing. New markets are being developed in Africa, Eastern European countries, and the Middle East. If we are able to get sufficient raw material, we can venture into many more markets.

How much investment has the industry attracted in the last three years?

The granite industry has attracted an investment to the tune of Rs 35,000 crore, which is excluding the working capital. Looking into the huge deposits, and the potential of the industry every alternate month, a new unit is coming up. Once the government opens the import of granite and marble under Open General Licence (OGL), the investment will double, including foreign investment in the sector, which in turn will create more employment opportunities.

What ails the granite industry?

n OGL: FIGSI has made several recommendations to the central government to permit the import of raw materials under the OGL. If rough marble is allowed, we can import and become competitive by re-exporting finished marble after value addition, leading to huge forex gains. We also want the new foreign trade policy (FTP) to help us compete at the global level by using OGL. Our Rs 24,000-crore industry is facing the risk of big losses in export earnings and job losses. As per the present EXIM policy, while there is restriction on import of granite and dimensional blocks into the country, the finished polished slabs and tiles are allowed to be imported, which is giving competition to the domestic processing industry.

The granite industry in the country has been suffering due to the absence of a uniform national policy. Moreover, shortage of raw materials due to non-grant of fresh leases and non-renewal of existing leases affected its growth.

n GCDR 1999: Even though there is a uniform policy by way of Granite Conservation and Development Rules (GCDR), 1999, which is issued by the Government of India, majority of the state governments are yet to implement the same. Stone products come under Minor Mineral Concessions Rules, the power rest with the respective state governments. Since each state is handling it in its own way, we are not getting a uniform policy for this industry.

Some states provide for a five-year lease, whereas, a few others offer 10 and even up to 20 years. In a few states, there have been no renewals at all. To everybody’s surprise, in Karnataka alone, about 4,000 applications are pending since the last 15 years. When we go to the courts, we are directed back to the state governments. And there is a huge waste of time.

The industry body is demanding long-term quarry mining leases and first come, first serve policy to be incorporated into the industry. It should have a timeframe of a minimum of 20 years, and a maximum of 30 years or more, until the minerals are available.

There are close to one lakh leases available across the country, owing to various reasons about only 50% of them are operational. Many states including Tamil Nadu, Karnataka and Odisha are going slow, and have stopped grant of quarry lease in revenue land and even renewal of existing leases are not granted.

What is Karnataka’s contribution?

About 20% of India’s granite production is from Karnataka. Earlier, Karnataka was at number one in production and exports of granite. Owing to lack of policy support from the state government, it has dropped to fourth place. Rajasthan, Telangana and Andhra Pradesh dominate the first three positions because of the industry-friendly policy adopted by them.