Business

Cement makers happy as MFN status to Pakistan withdrawn

Cement manufacturers are heaving a sigh of relief after India decided to withdraw most favoured nation (MFN) status to Pakistan and also slap 200% duty on imports from that country in the wake of the Pulwama terror attack.

One of the major items of import from Pakistan is cement and the Centre’s action would erase the price advantage that the neighbouring country had enjoyed for quite some years.

Annual imports

Cement industry sources had estimated imports from Pakistan in the range of 40,000 to 50,000 tonnes annually. With Islamabad enjoying the MFN status (now withdrawn), Pakistani cement enjoyed a price advantage of almost ₹100 for a bag of 50 kg. According to top industry sources, Thoothukudi and Kochi ports have been the access points for import of cement from Pakistan.

“It is being mostly imported by local traders and small builders as it fetches higher margins. Compared with the India-made cement, it ranks very low in quality,” said A.V. Dharmakrishnan, chief executive officer, Ramco Cements Ltd.

Cement from Pakistan, however, had not posed any real threat to the existing southern-based cement manufacturers, he said. The usage of Pakistan cement, nevertheless, was rampant in the north, he added. Pakistan cement gets into the north through the road route. “Allowing import of cement from Pakistan at a subsidised rate when the Indian firms have built up huge capacity, goes against the Make-in-India concept,” a top official of a leading cement firm said.

A combination of factors, including imports from Pakistan, has seen a general sluggishness in cement demand. Not surprisingly, the demand sluggishness, especially in the south, has hurt the cause of the cement industry.

Prices, however, had started firming up on the eve of busy season (January-September). There is a general sense of optimism that this trend will sustain in the coming days.

Sources indicated that concerns over cement imports from Pakistan had often be articulated to the authorities in the past — from competition as well security perspective. The economic action against Islamabad in the wake of terrorist attack in Pulwama, sources said, would address the twin concerns of security and quality of cement imports from that country.

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Printable version | Oct 31, 2020 1:27:30 PM | https://www.thehindu.com/business/cement-makers-happy-as-mfn-status-to-pakistan-withdrawn/article26305860.ece

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