KARACHI, Dec 20: Cement export to India has shown a declining trend, mainly owing to slowdown in construction and development works.

Cut in taxes on cement manufacturing by the Indian government has also been attributed to be one of the reasons of fall in cement exports to the neighbouring country.

Industry sources said presently, those shipments were being made, which had been committed couple of months back.

Against this, fresh orders and opening of LCs by the Indian importers have declined considerably during last one month, they added.

Despite the fact that the public sector construction and development projects in India continue to maintain momentum, the commercial and private sector projects affected by economic slowdown have been slashed considerably, thereby reducing the cement demand.

Sources said total cement exports to India during the month of October stood at 46,467 tons. Out of this 39,892 tons were exported by rail and 6,575 tons by sea.

Though there had been an increase in exports of cement during the month of November but the opening of new LCs for the last one month had declined substantially.

Cement exports to India during the month of November, 2008 stood at 66,566 tons. Of this 47,266 tons were exported through rail and 19,300 tons by sea.

But still there is a huge demand of cement in India, where mega projects of public sector such as Delhi’s Asian Games City is under construction.

Besides, the Indian government is striving hard to complete the metro rail project to cover the remaining 75 per cent of the city area by 2010, industry sources said.

In order to rescue their cement industry from recessionary pressures the Indian government has reduced excise duty by Indian Rs12 per bag (Pak Rs20). Furthermore, India has brought down VAT to 8 per cent from 12 per cent, thereby giving net impact of 20 per cent.

Consequently, it has become difficult for Pakistani cement exporters to keep their foothold in the Indian cement market, where substantial cement demand still remains to be meted through imports. The Pakistan government, sources said, has done nothing to save declining cement exports.

“All governments are striving hard and coming up with plans to rescue industry and jobs but our government is least bothered about this vital and sensitive issue,” the sources said.

The cement industry in Pakistan have to pay excise duty at Rs950 per ton, 16 per cent sales tax and have to foot high power and gas bills.

On top of all the issues is the harassment of the industry by different government departments, industry sources said. They said that Pakistan Standard Control Authority had filed criminal cases against the cement manufacturers.

The Competitive Commission of Pakistan is also chasing the industry, accusing it of forming cartel and initiated cases against a number of units, sources said.

The adverse impact of slow exports of cement to India would emerge in December as lesser orders have been received by exporters, sources said.