Cement industry faces challenges in global markets

17 Oct 2023 CW Team

According to the PHDCCI, the government should impose a minimum 40% import duty and either limit or prohibit the export of all raw materials, including limestone, steel slag, and fly ash. Currently, India is the second-largest producer and consumer of cement, with a manufacturing capacity of just under 600 million tonnes annually. Despite the industry's efforts to expand capacities in anticipation of strong demand in the coming years, it faces tough competition from neighbouring countries like Nepal and Bangladesh. These countries impose duties of at least 25% on imported cement. Moreover, while India allows duty-free imports of limestone, steel slag, and fly ash to these nations, domestic producers have to pay import duties for raw materials such as coal, pet coke, and gypsum.

The PHDCCI's letter highlighted the unfair trade practices, stating that cement from Bangladesh and neighbouring countries is flooding the Indian market, making Indian cement uncompetitive in these countries. The situation has led to 17 companies from Bangladesh capturing a portion of the Northeast Indian market and now shifting their focus to the eastern markets. Currently, the Northeast region of India has an annual production capacity of approximately 16 million tonnes, with an annual consumption of 10-12 million tonnes.

Despite having the production capacity, domestic industries produce less due to imports from Bangladesh and the unrestricted export of raw materials to neighbouring countries, as per PHDCCI.

The PHD Chamber of Commerce and Industry (PHDCCI) has informed the commerce and industry ministry that India's cement industry is facing challenges in competing in international markets due to the duty-free imports of cement within the country and the additional duties imposed on domestic producers for raw materials. In a letter to the ministry, the industry body has called for a reciprocal import duty and a correction in the inverted duty structure. According to the PHDCCI, the government should impose a minimum 40% import duty and either limit or prohibit the export of all raw materials, including limestone, steel slag, and fly ash. Currently, India is the second-largest producer and consumer of cement, with a manufacturing capacity of just under 600 million tonnes annually. Despite the industry's efforts to expand capacities in anticipation of strong demand in the coming years, it faces tough competition from neighbouring countries like Nepal and Bangladesh. These countries impose duties of at least 25% on imported cement. Moreover, while India allows duty-free imports of limestone, steel slag, and fly ash to these nations, domestic producers have to pay import duties for raw materials such as coal, pet coke, and gypsum. The PHDCCI's letter highlighted the unfair trade practices, stating that cement from Bangladesh and neighbouring countries is flooding the Indian market, making Indian cement uncompetitive in these countries. The situation has led to 17 companies from Bangladesh capturing a portion of the Northeast Indian market and now shifting their focus to the eastern markets. Currently, the Northeast region of India has an annual production capacity of approximately 16 million tonnes, with an annual consumption of 10-12 million tonnes. Despite having the production capacity, domestic industries produce less due to imports from Bangladesh and the unrestricted export of raw materials to neighbouring countries, as per PHDCCI.