Cement exports to India suspended after 200pc hike in import duty

• Indian buyers are asking Pakistani exporters to recall their containers and shipments

LAHORE: The export of cement to India has been suspended due to a 200pc increase in the import duty on all imports from Pakistan, following the growing tensions between Islamabad and New Delhi.

The Indian government announced to de-list Pakistan from the status of ‘Most-Favoured Nation’ (MFN) and increased the import duties by 200pc on all imports from Pakistan, including cement, virtually suspending all trade from across the border.

More than 350 trucks carrying cement have been stuck at the Wagah border after duties were increased. Similarly, shipments of 800 containers by sea also came to a grinding halt.

According to industry experts, the Indian market accounts for a quarter of Pakistan’s total cement exports. In the last financial year, Pakistan sold around $23 million worth of cement to India.

They said that the industry has started receiving messages from Indian buyers to recall containers, adding that some exporters have started recalling their shipments.

They said cement exports to India were set to thrive further following the Indian government’s decision of allocating Rs50 billion rehabilitation fund for Kerala, which was devastated by floods in 2018. As a result, both price and demand were on the rise in India, they added.

However, in present political tension, Pakistan exports will remain in jeopardy till the next government takes control of India by June this year. According to experts, Pakistan’s annual cement export to India hovers between $70-80 million.

The exporters said 75pc of Pakistan’s cement exports to India were done via the Wagah border while the rest by the sea route. Exports to India between July-January of the current fiscal year stood at 648,108 tonnes, while exports in 2017-2018 stood at 1.212 million tonnes.

According to experts, the trade balance between the countries is almost $1.36 billion in India’s favour. “If Pakistan reciprocates by increasing import duties for India, it will make the circumstances even more dismal for the Indian side,” they added.

Pakistan’s exports to India are worth almost $484 million as of FY18 versus imports of about 1.8 billion. The country’s exports to India comprise of raw hides and skins ($21.4 million) and other minor groups, including cotton, medical equipment and mineral fuels etc.

According to the data released by the All Pakistan Cement Manufacturers Association (APCMA), the cement industry exported 0.58 million tonnes of cement in Jan 2019 against the export of 0.35 million tonnes during Jan 2018.

During the first seven months of the current fiscal year, the exports were recorded at 4.14 million tonnes, 50.47pc higher than the 2.77 million tonnes exported in the corresponding period of last year.