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China is a big market for both segments

Suggested keywords: granite, textile yarn, Gem Granites, China, Indian stones, demand, exports, Tamil Nadu, synthetic stones

The granite and textile yarn industries are among those badly hit by the coronavirus outbreak.

“Half of our exports go the East, this market is completely gone,” says Rangaswami Veeramani, Chairman of Gem Granites, one of the country’s leading granite exporters. In 2018-19, India exported stones worth ₹5,651 crore, according to the data provided by the Ministry of Commerce. In the first ten months of the current fiscal, the exports of these products amounted to ₹4,465 crore. But now, there is a drastic fall in demand.

As for cotton yarn, India exported $1.28 billion worth last year, which, incidentally, was a steep fall from the previous year’s $2.09 billion — the fall was because of the US-China trade war. As much as 40 per cent of the exports go to China, says Hari Thiagarajan, Executive Director, Thiagarajar Mills, Madurai.

Veeramani told BusinessLine that China is a big market for Indian stones. In the stones industry, unlike other minerals such as iron ore or coal, each colour or variety is a product by itself and the demand changes fast in consonance with the ‘fashion factor’ abroad. China, he says, is a buyer of several products — Tam Brown, Galaxy, Maple Red — for which there is no demand anywhere else in the world.

Roughly 25 lakh people are employed in the Indian granite industry, more than half of them have lost jobs because of the fall in demand.

Even in the best of times the granite industry has been buffeted by many problems, biggest among them being the refusal of many State governments to automatically renew mining licences, high royalties, a recent levy called ‘district mineral development fund’ and the system of allocating mines by auctioning despite the fact that the mines are discovered and developed by companies. The absence of guarantee for renewal hampers investments and the auction method of allotting mines kills the initiative to put down money to discover and develop mines.

In addition to these, in Tamil Nadu, which has large granite resources, the State government reckons the recovery of granite from the mines at 90 per cent of stone pulled out, though the industry norm is 15 per cent.

On top of all this, the industry has been facing competition from ‘synthetic stones’, which are chipping away at its market share.

And then came the crippling coronavirus.

Veeramani pleads for moratorium on interest payments to banks; he wants the RBI to tell banks not to treat non-payment of interest as bad loans, so that banks could continue to lend for working capital — a crucial need of the hour.

The yarn industry, on its part, is also asking for a similar moratorium on interest payments and protection from being branded NPA by banks. In addition, it also wants the government to extend the scheme that provides ‘rebate of state and central taxes and levies’ (RoSCTL) to yarn. The benefits of RoSCTL are available to exporters of ready-made garments and made-ups.

Thiagarajan, who is also the Chairman of the Tamil Nadu Chapter of the Confederation of Indian Industry, also seeks reduction in import duty on key inputs for the textile industry — chemicals, dyes, resins and non-woven fabric. A big source for these items — China — has dried up, hence this plea. He also requests the Tamil Nadu government to temporarily lower electricity tariffs “by one or two rupees” while the coronavirus threat persists.

Published On : 16-03-2020

Source : The Hindu Businessline

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