The Hindu Business Line : `Cement import: Makers must conform to Indian standards'

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`Cement import: Makers must conform to Indian standards'

Gargi Shah

BIS says licence has to be got under its certification scheme

Import norms
Exporter will have to pay 1% of annual export contract value
BIS has certified 9 foreign manufacturers, none from Pak
`Cost benefit of Rs 30 needed for imports to be viable'

Mumbai April 17 Overseas cement manufacturers intending to export have to obtain quality certification from the Bureau of Indian Standards (BIS) to the effect that their manufacturing units conform to Indian standards.

"Foreign manufacturers seeking to export cement to India will have to obtain a licence under the BIS Certification Scheme for their units," Mr P.K. Batra, Director, Central Marks, BIS, told Business Line.

Procedure

The grant of licence by BIS is subject to an application to be made by the exporting manufacturer and the license is granted after personal inspection of the factory by a BIS official and satisfactory testing of samples in India.

The exporting unit will have to pay one per cent of annual export contract value to BIS as marking fees. This is in addition to a minimum marking fee of $2,000.

The provisions of the scheme allow BIS to grant a valid licence for up to two years, after the expiry of which a renewal application has to be filed by the company.

This is a self-certification scheme, which takes over a month, Mr Batra said.

9 certified so far

"Once the licence is granted we are informed about the consignments that come into the country. We ensure quality standards by procuring samples of the imported products from the India markets twice every year."

BIS has so far certified nine foreign cement manufacturers from Bangladesh and Bhutan.

This certification is only for Portland cement. No licence has been granted to anyone from China and Pakistan.

The clarification was given to Business Line in the wake of a cement consignment from Pakistan being held up at Nhava Sheva port for want of BIS certification.

Parallel certification

"On one hand the Finance Minister has abolished the duties on imports and on the other hand we have to battle with the procedures," said Mr T. Darvesh, Proprietor of Farouk Sadagar Darvesh & Co, which has imported the consignment from Pakistan.

"We did not know of the BIS certification, neither did the foreign supplier; hence we requested the BIS and the Director-General of Foreign Trade to waive the requirement on this consignment as I am burdened with the demurrage charges. Also my goodwill and that of the exporter is at stake."

The importer has also sought advice on any parallel certification valid in Pakistan, which can allow the consignment to be cleared this time.

Mr Batra said: "This consignment cannot enter the country for want of BIS certification even if the company is subsequently granted the certificate, as the consignment has arrived prior to the certification. We don't have the authority or the provision to waive the express procedures notified by the Government. The company has sent us some documents, but they are not complete; even the initial registration is not been done."

Import viability

There is a general consensus among large consumers that as a bulk product, cement is typically a local commodity.

While some real estate firms are looking into import options, infrastructure companies don't think it is practical.

"We are looking into the import option as Customs duties have been abolished," said Mr Niranjan Hiranandani, Managing Director of Hiranandani Developers.

"For imports to be viable we would look at a cost benefit of at least Rs 30 per 50 kg bag."

Mr Rajeev Talwar, Group Executive Director, DLF, said he had considered importing from China but this did not work out as it was prior to the duty cut.

The company is now examining options in the changed scenario.

However, the case is not similar with Hyderabad-based infrastructure company, IVRCL Infrastructure & Projects Ltd, which has 170 projects all over the country.

As the Government tenders specify the cement brand to be used in infrastructure projects, import of cement will require approval of Government Departments of different States over and above BIS certification, said Mr Balarami Reddy, Director (Finance) and Group CFO of IVRCL.

Unless the site is near the port, inland transportation may not make it viable, according to Mr Y.D. Murthy, Senior Vice-President (Finance), Nagarjuna Construction Company.

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