Modi government must do this to revive cement industry
The cement industry is witnessing slow uptake in demand and badly needs a booster from the Modi government in the upcoming Union Budget 2018. “Since 2007-08 import of cement into India is freely allowed without having to pay basic customs duty whereas all the major inputs for manufacturing cement such as Limestone, Gypsum, Coal, Pet coke, Packing Bags etc. attract customs duty,” FICCI says. “Presently due to low demand of cement in the country more than 116 million tons of domestic cement capacity is lying idle and duty free import of cement causes further undue hardship to the Indian cement industry already reeling under low capacity utilization,” the industry body says.
The FICCI has pitched for providing a level-playing field. The industry has recommended that basic customs duty be levied on cement imports into India. “Alternatively, Import duties on goods – Coal, petcoke, Tyre Chips, Limestone, Packing Materials and Bags, Gypsum, and Refractories etc. – required for manufacture of cement be abolished and freely allowed without levy of duty,” FICCI says.
In October 2017, retail cement prices jumped by Rs 12 per bag in the second quarter of this fiscal, with a sharp rise of Rs 36 in west and Rs 15 in south on a year-on-year basis, owing to rising production costs, accoridng to a report said. Cement companies will continue to bear the brunt of higher pet-coke prices that increased 13 per cent q-o-q to $96 per tonne in Q1 FY18, Kotak Institutional Equities Research Analyst Murtuza Arsiwalla said in the report.