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All India Granites & Stone Association: Promoting Indian Stone Industry

Stona 2014 LogoIndia has the potential to reach the number one position in exports of natural stone products.

Taking note of the potential of the domestic and international natural stone industry, a few visionaries of stone industry joined together and formed All India Granites and Stone Association (AIGSA) way back in 1983 to promote the natural stones of India.

The sole object of the Association was to promote stones of India across the globe and to resolve the domestic problems faced by the mining sector. It was not an easy task for them, as the mining sector, which was an unorganised sector, faced many problems and challenges.

In the past 30 years, AIGSA has grown from strength to strength with the co-operation and support of its members. During these 30 years, AIGSA has achieved many landmarks and has membership from all the sectors of the natural stone industry of India.

Initially, 70-80 per cent of rough dimensional blocks were exported to Japan, Italy and other countries. Till 1990, many countries did not know about Indian granite resources, as Indian blocks were processed in Italy and exported as Italian products.

Now the Indian industry has acquired state-of-the-art technology in the field of processing. This technology is at par with the technology employed in other parts of the world; and our products, which are well accepted all over the world, are being used in many big projects across the globe. Today, India is exporting to more than 90 countries in the world.

AIGSA works as a bridge between the industry, the state and the central government. The Association has been recognised by the government and has been nominated in various committees constituted by the central government like Granite Development Council, Planning Commission and National Board of MSME, etc.

Due to the efforts made by AIGSA, the mining and processing sectors have developed considerably. We are currently exporting 70-80 per cent of finished goods after value addition.

AIGSA has played a significant role in framing Granite Conservation and Development Rules (GCDR-1999) by ministry of mines, government of India, for promotion of granite industry in the country. Each state had been following its own rules, and AIGSA felt the necessity to bring a uniform rule in the country. GCDR 1999 was the first step to bring a uniform policy for the granite industry in the country. It is unfortunate that in spite of AIGSA’s effort to bring a uniform policy, many states are still not following the GCDR rules, due to which the growth of granite industry has slowed down.

We would have changed the face of the Indian stone industry, had we received proper support from the central and state governments.

AIGSA has lined up many programmes for the development of the Indian stone industry:

Establishment of training institute

Artisans park and artisans training programme

Testing laboratory

Research Centre

Exhibition and trade centre

Keeping these programmes in view, it was felt by the members that the Association should be referred to as federation, not association, to get full co-operation from various local associations across the country and to get better recognition, nationally and internationally, for the stone industry of India. Accordingly, All India Granites and Stone Association will be renamed as “Federation of Indian Granite and Stone Industry” from 1st April 2014.

Stone Fair across the Globe

All stone-bearing countries across the globe are holding stone fairs to promote their stone industry. The most important fairs in the world include Marmomacc in Verona, Stone-tec in Germany, Carrara in Italy, Izmir in Turkey and Coverings in USA. Countries such as Egypt, Poland, Brazil and Russia also hold fairs throughout the year during different periods of time.

AIGSA conducted the first STONA International fair way back in 1987 – the first ever stone fair held in Asia. Today, STONA has been recognised all over the world. A brand name in the world of stones, STONA has become a powerful platform for the Indian stone industry to market Indian stones internationally. It now occupies the seventh position in international stone fairs.

STONA 2014

During 1987-2012, AIGSA conducted ten editions of international stone fair at Bangalore. It has recently announced the 11th international granite and stone fair – STONA 2014 – to be held at Bangalore International Exhibition Centre (BIEC), Bangalore, from 12_15th February 2014.

The salient features of this fair are as follows:

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Achievements of STONA

When AIGSA held the first STONA fair, India’s export of rough dimensional blocks totalled Rs 50 crore. After ten STONA fairs, the country’s export of rough blocks and finished goods crossed the Rs 9,000 crore mark after value addition.

Shilpa Gram: A Social Commitment of AIGSA

AIGSA, since its inception, has been committed to the promotion of rural artisans. Since the days of the first STONA fair, it has been inviting artisans from all over India and providing them with free stall, local stay, food, cost of travelling and transportation of materials from their place to Bangalore and so on. We are happy to mention that many of the artisans who got exposure at STONA fairs have received national recognition and become exporters themselves. Around 50 artisans from all over India have been invited to showcase their skill in front of the international community at STONA 2014.

Indian Stone Industry – Present Scenario

Our journey has not been smooth all the way, and we are still facing many difficulties in promoting the global stone industry. AIGSA has been playing a very important role in co-ordinating the industry with central and state governments for the formation of an appropriate policy for the industry. With our concerted efforts, India has become the seventh largest stone exporter in the world, behind China, Italy, Turkey, Egypt, Greece and Brazil. We have the largest resources of granite and natural stones. With assistance from the government, we can surely become the topmost stone exporter in the world.

Export of GraniteIndian Stone Deposits

India is a treasure trove of stone deposits. Our country probably has the largest reserves of granites and natural stones in the world. India accounts for 20 per cent of the total world reserves in granites, marbles, sandstone, slate, etc. (approximately 1,690 million cu m). We have over 160 shades of granite colours. Unfortunately, most of the reserves are located in forests and restricted hilly areas. Today, Karnataka, Andhra Pradesh, Tamil Nadu and Rajasthan are the top producers of granite and marble. Jharkhand, Chhattisgarh, Madhya Pradesh, Orissa, Kerala and Gujarat are the emerging states. Because of various restrictions, such as poor state rules and environmental concerns, we are able to exploit a dismal 3 per cent of our resources.

The Indian stone industry is spread throughout the length and breadth of the country. The journey of the processing industry started with circular saw machines; and gradually, because of constant upgradation of technology, it has graduated to using gang saws and circular wire saws. The latest resin lines, polishing lines and other top-of-the-range equipment that we use today have enabled us to meet the international quality standards. Even in today’s mining sector, diamond wires are being used, dispensing the traditional blasting method. There are more than 20,000 units functioning all over India with a huge investment of more than Rs 50,000 crores and providing job opportunities to more than 15 lakhs people.

The granite, marble, slate and sandstone mining and processing industries located in various parts of the country are as follows:

Karnataka – Kanakapura, Kollegal, Chamarajanaar, Nanjangudu, Mysore, Hassan, Ilakkal, Tumkur, Sira, Bangalore, etc

Tamil Nadu – Hosur, Salem, Krishnagiri, Madurai, Shivakashi, Chennai, Pondicherry, etc

Andhra Pradesh – Chittor, Hyderabad, Warangal, Karimnagar, Khamam, Ongole, Vizag, etc.

Rajasthan – Jalore, Jaipur, Kishnagarh, Rajasmand, Abu Road and Jaislmer

Parts of Orissa, Gujarat, Haryana, Madhya Pradesh and Himachal Pradesh

Granite deposits are also present in many parts of West Bengal, UP and Jharkhand

Hurdles: Policy Paralysis

The Indian stone industry is facing many obstacles. Policy paralysis has adversely affected the growth of the industry. Our industry has not been recognised by the central and state governments and is not finding any place in both the central and state budgets. Various encouraging packages and assistance have been given to other industries; for example, the textile and sugar industries. But the government does not give enough attention to stone industry.

The Indian stone industry still comes under ‘minor minerals’ in spite of the huge investments made in the field of processing and mining. We have been treated at par with sand mining and crushers used for road making! All this has slowed down the growth of the industry.

Shortage of Raw Material

There is a boom in construction activity in India and across the globe. Stone has found a place in various applications, such as construction, interior decoration, monument and memorials artefacts and garden items. In view of this, the processing industry has started its operation throughout the length and breadth of the country.

Mining industry cannot keep pace with processing industry. There is a huge shortage of raw materials in the country due to which prices of rough blocks have shot up. No new leases have been granted and the industry is facing many obstacles, such as resave forest, tiger reserve, wild life sanctuary, national parks, Western Ghats and the Aravali region. All these factors have resulted in a shortage of raw materials for the developing industry.

The Exim policy has hit the ‘last nail in the coffin’ of stone industry. The industry has been facing a license system for the import of rough dimensional blocks. There is red-tapism in the license system; black marketing of licenses. These have resulted in the downfall of the industry. Shortcomings in the present license system do not provide level playing field for the Indian stone industry on the international market. The license system is also creating monopolists – big mine-owners and those who fulfill the criteria for procuring the licenses.

Three major notifications have been recently issued by DGFT No. 36, 37 and 38 of the Exim policy. These notifications have rattled the Indian stone industry. All these notifications help the marble mine owners in the country to procure the licenses. These notifications are protecting the interest of license holders rather than the interest of the industry. The notifications issued by DGFT deal with the following:

The present policy under Chapter No. 25 allows import of marble blocks under license scheme with restrictions. Granite blocks are not allowed for import.

Under chapter 68, finished slabs are allowed under OGL scheme with floor price.

Notification No. 36 issued by DGFT on 26th August 2013 allows import of one lakh tons of marble blocks by those companies that have invested abroad in mining activities.

Notification No.37 issued by DGFT on 26th August 2013 allows import of six lakh tons of marble blocks for the financial year 2013-14 with artificial criteria without considering the merit.

Notification No. 38 issued by the DGFT on 26th August 2013 revises the value cap for finished slabs from the earlier level.

100 % Marble EOUs are not allowed to sell under DTA sale, which is available to all other industries.

All the above policy notifications are detrimental to the interest of the natural stone industry in India, which requires immediate intervention of the ministry of commerce. AIGSA has been requesting the government of India and DGFT for the last four years to amend the policy to allow import of granite and marble blocks under the OGL scheme for the survival of the Indian stone industry, which is facing a severe shortage of rough dimensional blocks for value addition.

Effect of China on the Indian Stone Industry

China started its stone business just a decade ago. It has granite quarries, but imports a huge quantity of granite blocks for value addition. Its imports of rough dimensional blocks totalled $2,300 million and its exports of value-added products totalled $4,134 million. India has a ten-decade advantage over China but its exports still total $159 million; and that is mainly because of the restrictive policy adopted by the Indian government on import of rough dimensional blocks. China’s export of natural stone is 26 times more than that of India – and that has happened because of the restricted import policy on rough dimensional blocks. The gap is widening and a level playing field has to be created for the Indian stone industry to compete with China on the international market.

The lacuna in the Exim policy has given an advantage to China, and a large quantity of Indian granite blocks is being exported to China. After value addition, China exports the finished goods to different parts of the world, which creates unwanted competition for the Indian industry. Chinese finished products (slabs and tiles), which are being imported to India under the OGL scheme with value cap, are posing tough competition for the Indian domestic processing industry. If this situation persists, the day is not far off when the entire Indian stone market will be controlled by Chinese finished goods.

FDI in Stone Industry

India is now open to foreign investment in all business sectors, including retail marketing, etc. However, no overseas investment is coming to India in the natural stone field because of policy issues, such as not allowing free import of raw material. Besides, there is a shortage of raw material from the domestic mining sector. We are sure that once the mining policy is made more industry friendly and import of granite and marble is brought under OGL, there will be an inflow of FDI in the stone sector.

Large TableConclusion

AIGSA is playing a very important role in highlighting the weakness of the present Exim policy – a policy that is only helping China and causing much damage to the Indian industry. We hope that the government will formulate an industry-friendly policy that enables the Indian stone industry to grow as rapidly as possible. To achieve the above objective, the Association has put forward the following recommendations:

• Create a “mineral zone” where the natural resources are available. In this “mineral zone,” the mining activity should be allowed freely without the interference of departments like Revenue, Forest, Ecology, Wildlife, Environment, etc. (single window system), so that the entrepreneur can work peacefully and raw materials are available to the processing industry. Adoption of this recommendation will rapidly enhance growth.

 Granite has to be declared as major mineral instead of minor mineral.

 The import of granite and marble blocks should be brought under the OGL scheme so that sufficient quantity of the raw material is available to the industry.

 Import of finished products should be restricted by fixing the floor price to protect domestic units.

 Import should not be allowed by those who have invested in the mining sector abroad.

 100 % marble EOU should be allowed DTA sale.

If all the above recommendations are adopted by the central and state governments, our value- added products will soon reach the number one position in the world and our exports will cross the Rs. 18,000 crore mark in the coming five years, the current level being Rs. 9,000 crores.

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