Marble import policy was opened to an extent with the release of a DGFT policy circular on 31 August with the near doubling of the import quota for processing units who imported the blocks during the two years of free importing under the market based Special import licence (SIL) in the years 1999-2000 and 2000-2001.

The item wise import policy too was amended to incorporate the marble policy in the main chapter 25. However, a minimum value restriction of $ 2700 per cubic metre. This is seven times the minimum value of $ 300 per cubic metre is specified for polished marble blocks and tiles falling in heading 68.02 of the customs tariff. This will immediately affect goods worth Rs 45 crores at 2003-04 import level. The formulation of the restriction in terms of cubic metres when the actual import of tiles, the major item in the finished goods segment, is in square centimeter or feet will act as a good non tariff barrier. This is when the Customs Tariff Act, 1975 specifies weight in kgs as the unit of measure in the heading. The idea here is to allow only high value down stream products to protect both the raw material and finished products industry.

DGFT has taken another step forward in introducing transparency in the regime with the specification of the annual quantity limit of 1.30 lakh tonnes in the policy circular itself. This will take the value to some Rs 200 crores based on the minimum import price of $300 per tonne. The actual import in the previous dispensation was Rs 89 crores per year in 2003-04, according to the DGCIS. The previous condition of limiting import to half the actual import figure in the two years of the SIL licensing has been dropped.

The import is limited to only those units who were importing during the two SIL years of 1999-2000 and 2000-2001. It may be recalled that a number of units set up shop in the sales tax free haven of Silvassa near Mumbai. The units imported expensive marble processing machinery on the basis of the relaxation to import freely by use of the special import licence (SIL) which was freely traded in the market and was said to represent the market determined premium on forex earnings. The demise of SIL should have led to the transfer of the goods from restricted to free category following removal of QRs on imports under the WTO regime. However, in this case, pressure from the Rajasthan lobby of miners and processors led to the continuation of import restrictions on grounds of environment protection. The Silvassa units were left with hundreds of unemployed tribal workers on their rolls with no raw material to process with the return of negative list licensing on marble blocks. Limiting opening up followed in 2001 to ease the situation for the Silvassa units along with used categories like star hotels and religious institutions. (The last two are now dropped in the new policy circular.)

The Silvassa units who earlier suffered now have a monopoly with the near doubling of the import quota to 1.30 lakh tonnes. The import duty is at a record low of just 15 percent with full exemption of countervailing duty on marble blocks. Only slabs which are cut size pieces involving manufacturing are subject to countervailing excise duty of 16.32 percent. Of course, there is the minimum import price of $300 per tonne to stop the entry of low price blocks but given the free play of forex movement in today’s liberalized and globalised world the check has little implication in actual import operations. The minimum value restriction of $ 2700 per cubic metre on the down stream tiles will virtually freeze import competition on this segment. The result will be a further boost to the monopoly rents earned by the erstwhile SIL importers.

The partial liberalisation corrects to an extent the anomalous situation where the downstream product, that is, finished tiles, is freely importable but rough blocks are not allowed to protect the marble industry of Rajasthan with its 1100 gangsaws and 50 or so tiling plants.

There are more than 245 varieties of marble in the world market with Italy leading the show, coloured, with design. In India only white varieties, Rajnagar and Makrana in Rajasthan are well known for the popular white colour common to temples, gurudwaras and mosques. Bidasar green from Churu and Jaisalmer yellow are the other varieties available. An open import policy on the raw material will conserve local stocks for future generations and also generate exports based on competitive advantage of low production and labour costs. The Indian consumer will also have a chance of getting to see other varieties of marble instead of the ubiquitous white variety. Import of roughs will give employment to the poor and competition to the import finished tiles of both marble and ceramic varieties which are being imported in huge quantities.

Exchange Rates

Exporters to the difficult European market are happy with the strengthening of the Euro once again. The exchange rates for valuation of exports for the month of September show a fall in the value of the rupee against the Euro by 2.52 percent. They will now get Rs 53.50 in export value, the corresponding incentive in terms of the drawback and DEPB will rise. The rupee has fallen even further by 4.26 percent and 4.35 percent against the Pound Sterling, Swedish Kroner. The dollar rate is more or less steady Rs 43.55 when compared to the August rate. All those who had taken cover against the weak Euro regret their action at the loss of faith in the rival to the dollar.