Indian engineered quartz stone manufacturers face unprecedented crisis amid 50% US tariff

Hyderabad: Indian engineered quartz stone manufacturers find themselves caught between the devil and the deep sea as the 50% tariff imposed by the USA delivered a severe blow to an industry still stabilizing after initial challenges.

Unlike most Indian exports that have diversified international markets, engineered quartz represents the only sector with complete dependence on the American market, a singular reliance that has proven catastrophic following USA President Donald Trump's tariff announcement.

All consignments are now halted at ports, creating unprecedented uncertainty for an industry that began operations less than a decade ago.

The engineered quartz industry in India is relatively young, with most manufacturing units established between 2015 and 2016. This expansion aligned with America's growing preference for quartz stone over traditional granite, prompting many granite exporters to make the strategic and capital-intensive shift to engineered quartz manufacturing. However, a significant number of these units have yet to reach profitability.

Quartz stone machine.

"Quartz stone manufacturing started in India less than a decade ago. Roughly 20,000 people are directly employed and 60,000 indirectly dependent on this industry. We are only stabilizing now. Some units launched operations just a year ago. This unexpected 50% tariff announcement has come as a real shock to all of us," Govindaraju Krishna Rao, founder president of the Federation of Indian Quartz Surface Industries, who operates Mahi Granites Pvt Ltd on Hyderabad's outskirts told DH.

"We are hoping against hope for a positive outcome in trade talks between both nations and that tariffs will be lowered. Otherwise, it's going to be disastrous for the quartz industry in the country that has just started seeing growth," he added.

The industry's current scale is significant, with approximately 2,500 containers of quartz stone exported to the US monthly, generating an annual turnover of around Rs 6,000 crores. The manufacturing base comprises roughly 50 quartz stone factories concentrated mainly in Andhra Pradesh, Telangana and Rajasthan.

Indian manufacturers face substantial challenges in shifting to other international markets, where Chinese competitors dominate through aggressive pricing enabled by substantial government export incentives.

"Due to anti-dumping duties as high as 150% on Chinese quartz stones, we survived in the US market. Chinese manufacturers have turned to other countries with aggressive pricing as they receive significant government support through incentives," explained another quartz stone manufacturer in Rajasthan. "A 25% tariff could be managed—10% absorbed by exporters, another 10% by US buyers, and 5% adjusted in the supply chain. But 50% is impossible. Shipments have already been stopped at Indian ports," the Rajasthan based quartz manufacture told DH.

If the 50% tariff continues, manufacturers fear an inevitable march toward bankruptcy and non-performing asset (NPA) status.

"A unit can be managed for one or two months without production using past earnings. Beyond that, it's impossible if exports are totally stalled due to 50% tariffs. The government should step in as they did when helping the industry with bank repayments during Covid time," Sudheer Kumar Sidda of Jyothi Granite Exports India Private Limited in Andhra Pradesh's Prakasam district told DH. Sudheer established India's largest engineered quartz surfaces facility in Prakasam district during the COVID period around 2020.

Global demand for engineered quartz surfaces is estimated to grow at a compound annual growth rate (CAGR) of 8.9% to USD 33.50 billion during 2020-2027.

However, domestic demand for quartz stone remains limited. "The Indian market is marble-based, especially imports from Turkey and Italy. Only if our government imposes duties on them can local consumption of quartz pick up, which is also a long-term goal. But currently, we need an immediate solution with exports completely stalled," Krishna Rao added.