The Indian government has decided to ban export of cement to arrest rising prices.
"We have banned the export to take care of mismatch between supply and demand of cement," Minister of Commerce and Industry Kamal Nath said.
The cement prices have been increasing at regular intervals for the last two years, prompting government to take several steps without much success. The steps included scrapping the import duty and allowing purchase from Pakistan.
Commenting on the decision, Cement Manufacturers’ Association (CMA) President H M Bangur said: "Whatever the government decides, must be good for the nation".
Exporters termed the move as "retrograde step", stating it would severely hit manufacturers in Gujarat, especially those who have booked orders.
"It is a very retrograde step. We have firm international commitments for the next 6-8 months," Ambuja Cements Ltd Managing Director AL Kapur told PTI, adding his company has export orders of 0.7-0.8mt for the current year.
Presently cement export takes place from Gujarat, which has a surplus of about 4.2Mt, he added.
India exported 3.33Mt of cement during April- February period of last fiscal, CMA data showed However, JK Cement Group Executive President R G Bagla said, "This ban will hardly affect the industry as the country exports less than two per cent of the total production." The average price of cement has increased to Rs231 per bag in October 2007 as compared with Rs158 a bag in December 2005. Presently, a cement bag costs Rs230-260 across the country.