The world of trade is on the verge of a major transformation. Indian companies have just had the rug pulled from under them. The United States, a major destination for Indian granite exporters, has witnessed a sharp increase in tariffs in recent weeks. This has posed a significant and direct challenge to the natural stone industry, which has been playing a pivotal role in the Indian economy. It demands a strategic response.
With the 50 % duties on India’s imports now getting imposed, the stone exports from India are going to get hammered. A report submitted by Dr C.H. Rao of Federation of Minor Minerals (FEMMI) says that exports could fall by 50 per cent in the near future. Plus, they predict potential job losses of 200000+. The quartz manufacturing units will be hit further because the higher tariffs make them unviable against competition like Vietnam, etc. Quartzite exports do not face the 50 per cent tariffs that granite and marble also confront, and which will contribute to the decrease in the overall stone export. Stone processors from the European Union are most likely to be those that will fall subject to tariffs of 15% and they are the ones who, in many likelihood, would take up the space being left by Brazil and India.
The impact is supposed to be extreme in both the short and long run. The numbers and words tell some of the story.
The Numbers Say Everything
India is one of the biggest players of the global stone industry. It holds massive granite reserves. In addition, granite companies have advanced stone processing capabilities across the country. The total production of granite in the country is about 130 million tonnes per annum. This has made India the second largest producer in the world.
A major chunk of this production is destined for export. The fact is India does have about 85-90 per cent of its total granite export gets exported and recognizes that it doesn‘t have conservation systems in place. The industry has been an important earner of foreign currency. It had been adding about $5 billion a year to India’s foreign trade.
The US is a crucial part of this trade. It is a significant contributor to India’s stone exports. The US is among the leading destinations for Indian granite, according to recent trade data.
The Tariff Reality
The new American tax is not a tweak. It’s a major barrier. Duties on some Indian imports now stand at 50%. This is a mixture of a basic tariff and new, incremental tariffs.
This new rate results in an enormous pricing disadvantage. Indian granite, thereby, is made much more expensive for U.S. buyers. It also disadvantages Indian products against competition. Countries like Vietnam and China encounter reduced tariffs. Businesses are affected immediately.
For a container of granite that used to cost, say, $20,000, the new tariff tacks on an additional $10,000 in expense. This is a cost that few granite importers in the USA are prepared to absorb.
The Fallout: Immediate and Long-Term
The consequences are already visible. Shipments of granite and other stone goods are stalled at ports. Orders are being cancelled. The supply chain overall is a mess.
Margins for Indian granite polishers are shrinking. They must choose. Or are they forced to eat the cost, cutting into their profits? Or do they absorb the cost and pass it on, taking a hit to their volume of sales?
Small and medium businesses are particularly at risk.” They don’t have the economic cushion to weather that kind of shock. The Federation of Indian Granite and Stone Industry (FIGSI) has expressed deep concern. Millions of livelihoods are on the line.
The industry also offers both direct and indirect employment to a large number of people. This number is generally classed as a low estimate in the hundreds of thousands. A prolonged downturn in exports could lead to broad job losses.
A Strategic Pivot
With this new reality, Indian granite exporters have to find a way out. The business model is dead. Diversification is no longer an option: It’s a requirement.
The industry must also proactively open up new markets. Potential venues would be Europe, the Middle East, and East Asia. The US market is vast, but too much dependence on it has turned out to be a strategic vulnerability.
This shift will not be easy. Different markets need different tactics if you are to compete. That includes grasping new consumer tastes. It also carries the challenge of meeting other logistical and trade regulations.
Investing in the Future
Aside from diversifying to new markets, the tariff increase is an opportunity for creativity. Indian companies need to see if they can increase their value proposition. That means getting past the export of raw blocks, or even basic slabs.
The way forward is value added.” Think pre-fabricated countertops. Consider custom-designed architectural elements. These products sell for higher prices. They can help defray the burden of tariffs.
This comes at a massive cost of technology. Only if Indian processing units revamp their machines. They have to invest in automation and precision cutting devices.
The government also has its part to perform. Industry heads are calling for relief. They need export incentives. They are demanding that the government intervene diplomatically. They are also looking for help to explore new markets.
The Road Ahead
The tariff shock is a warning. It underscores the fickle nature of global commerce. It provides a lesson in the importance of having a flexible and resilient business model.
The granite industry in India has a strong base. It has vast natural resources. It has a skilled workforce. It is known for quality.” Those are skills that will prove essential in the months and years ahead.
Though the short-term future is bleak, it’s not hopeless. The American tariff compels a rethink of the entire business. It puts pressure on efficiency, innovation, and diversity.
Now is the time for some long-range thinking. It’s a time to work together. It is time for Indian Granite exporters to prove that they can withstand such pressures. Whoever can do that the best is who will wind up doing well in this industry for years to come.