Cement imports from Pakistan, which took a hit during January-February on account of a weakening rupee and re-imposition of countervailing duty (CVD), has jumped back to its normal monthly levels of around 60,000 tonnes. Imports had dipped to a mere 11,000 tonnes in January. Imports in the long-term is likely to continue at similar levels since imported cement is cheaper by around 10 per cent to the domestic produce.
Cement imports from Pakistan started in September 2007 after India removed the import duty while it also did away with the CVD and special additional customs duty. These steps were taken to augment the domestic demand-supply gap, which now stands largely corrected with the addition of new capacities.
Since then, Pakistani firms have exported 1,242,588 tonnes of cement to India. It is worth mentioning that this does not account for even 1 per cent of the country’s annual consumption of over 200 million tonnes. Though the volume of import from Pakistan is small to impact the pricing of the Indian companies, cheaper import has certainly affected domestic sales in pockets like Amritsar and Mumbai.
The imported cement is selling at Rs 220-225 a bag (50 kgs) in Amritsar vis-a-vis Rs 245-250 for the indigenous cement. “Cement import was rendered unattractive due to the weakening rupee. Plus, the government had re-imposed the CVD. It was only after the Pakistani companies agreed to cut prices by over $10 a tonne to $54 that import has resumed,” said an Amritsar-based importer. Interestingly, domestic companies raised prices by Rs 3-7 a bag earlier this month.
These imports need to conform to the quality specifications laid down by the Indian Bureau of Standards (BIS). As of now, 24 Pakistani cement companies have obtained the BIS licence to export cement to India. Though companies in Bangladesh. Bhutan and China have also secured BIS licence, import is mainly taking place from Pakistan.
Source : Business Standard