New Delhi: Cement imports from Pakistan will marginally ease tight supplies, an Indian industry ministry official said on Wednesday, but analysts said the move would not help curb prices.
Industry secretary Ajay Duasaid the government has cleared the import of 525 tonnes of cement from Pakistan through Mumbai port, and a smaller quantity through Punjab’s Wagah border crossing.
Analysts said the relatively minor imports would not significantly improve a mismatch between demand and supply that has pushed up prices.
“We need to import about 10 million tonnes (mt). Unless it is cheaper and in good quantity, I don’t expect any significant impact on prices in the next six months,” said Ajit Motwani of Emkay Shares, a local stock brokerage.
India cut duties on cement early this month to boost supplies and fight inflation.
In March, domestic firms raised cement prices by Rs10-12 per 50kg bag soon after the government hiked duty on domestic output in the Budget.
The government has been urging firms to roll back the increase without any success.
The imported cement can only be distributed once the Bureau of Indian Standards (BIS) issues clearance certificates to the Pakistani firms. That may take another five weeks, Dua said.
According to the Associated Chambers of Commerce and Industry, Pakistani firms plan to supply 10,000 tonnes of cement at Rs155 per 50kg bag through the Wagah border, Rs50 below domestic prices.
D.K. Joshi, chief economist at domestic ratings agency Crisil, said demand would continue to outstrip supply for the next two to three years.
Cement makers have pledged to add 100mt of capacity by 2010 at a cost of Rs40,000 crore.
The Cement Manufactureres Association of India estimated that output grew 9.5% to 155.31mt during 2006-07.
Asia’s fourth-largest economy is building more roads, ports, airports and power plants and residential complexes to sustain high economic growth.