GST - A Boon for the Indian Cement Industry

India: Transition to GST (Goods and Services Tax) in India is expected to reduce tax rate for the cement sector to 18-20%, from the current tax rates of around 27-32%. A significant reduction in indirect tax on the cement industry is anticipated to aid the cement companies to save on their logistic costs, due to rationalization of warehouses and lower transportation costs (comprising up to 20-25% of total revenue). Cement industry in India is the second largest producer across the globe and it is forecast to become the net exporter of cement and clinker over the next ten years. India cement industry is projected to grow at a CAGR of 11.14% in volume terms during FY2011-FY2017F, and is forecast to reach 407 million tons by March, 2017. Major cement manufactures, such as JK Cement, Ultratech and Shree Cement are expected to benefit from the restructuring of indirect taxes in India.

TechSci Research depicts that the introduction of Goods and Services Tax in India would benefit the India cement industry and improve the profitability of domestic cement manufacturers. Improving conditions of the India cement industry is projected to have a positive impact on the concrete admixtures industry of the country.

According to the recent report published by TechSci Research, “India Naphthalene and PCE based Admixtures Market By Type, Competition Forecast & Opportunities, 2011 – 2021’’, naphthalene and polycarboxylate (PCE) admixtures market in India is projected to reach USD683 million by 2021. Strong growth in construction sector, increasing government emphasis on infrastructure development and implementation of stringent regulatory norms is expected to continue boosting demand for naphthalene and polycarboxylate (PCE) based admixtures in India over the next five years. Few of the major naphthalene and PCE based admixtures manufacturers operating in the country include BASF, SIKA and Fosroc, among others.