Challenges Facing Telangana’s Granite Industry

“The increase in transport charges due to fuel price hikes is taking a toll on our business.” — J. Praneeth Rao, Karimnagar District Granite Industries Association

The ongoing conflict in West Asia has exposed the vulnerability of Telangana's export-oriented granite industry. Rising fuel prices, disrupted shipping routes, declining global demand, and structural bottlenecks have combined to create one of the most serious crises faced by the sector since the COVID-19 pandemic.

Why Telangana's Granite Industry Matters

Telangana is among India's leading granite-producing States.

Major Granite Clusters

Key Export Destinations

• China
• UAE and Middle East
• Japan
• Taiwan
• USA
• Europe

The industry supports:

250+ Quarries
590+ Processing Units
30,000–40,000 Families
Thousands of Migrant Workers

How the West Asia Conflict Triggered the Crisis

The crisis illustrates how geopolitical shocks affect local economies.

West Asia Conflict
        ↓
Higher Crude Oil Prices
        ↓
Rising Diesel Costs
        ↓
Higher Freight Charges
        ↓
Supply Chain Disruptions
        ↓
Reduced Exports & Production

Direct Impacts

• Rising transportation costs.
• Increased shipping charges.
• Cargo delays.
• Higher prices of imported machinery and drilling tools.
• Reduced international demand.

Karimnagar: The "City of Granites" Under Pressure

Karimnagar's famous Tan Brown granite was once in high demand globally, particularly during the Beijing Olympics construction boom.

Current Situation

The district exported about 56,730 cubic metres of granite during April-May 2026, but industry stakeholders report weakening demand and growing inventories of unsold slabs.

Export Vulnerability

Raw Granite Blocks → China

Polished Slabs → Middle East

This concentration makes the industry highly vulnerable to external disruptions.

Khammam's Black Granite Industry: An Industry in Retreat

Khammam's black granite sector once generated nearly:

Annual Turnover: ~₹1,000 Crore
Employment: ~1 Lakh People

Present Status

Industry estimates suggest around 3,000 workers have already lost jobs.

Structural Challenges Beyond Geopolitics

The slowdown cannot be attributed solely to global conflicts.

Quarry Lease Policy Concerns

Industry representatives argue that:

• Earlier prospecting-based leases encouraged exploration.
• Open auction systems have increased entry barriers.
• Fewer entrepreneurs are willing to invest in exploration.

Government authorities maintain that lease allotments must follow regulatory and environmental safeguards.

Raw Material Shortages

A major concern is declining quarry activity.

The China Factor

The sector has struggled since exports to China weakened after the pandemic.

According to industry associations:

• Nearly 70% of quarries in the erstwhile Karimnagar district have shut down.
• Demand from China remains subdued.

This highlights the risks of excessive dependence on a single export market.

Employment and Social Impact

The crisis has deeply affected migrant workers from:

• Odisha
• West Bengal
• Bihar
• Jharkhand
• Uttar Pradesh
• Rajasthan

Everyday Consequences

Reduced Factory Operations
          ↓
Lower Incomes
          ↓
Migration Back Home
          ↓
Social and Economic Distress

Workers report:

• Falling remittances.
• Job insecurity.
• Return to traditional firewood stoves due to rising LPG costs.

Cost Pressures and Tax Concerns

Industry participants face multiple financial burdens.

Rising Logistics Costs

Other Challenges

• Rising electricity charges.
• Bank loan repayments.
• Costlier imported cutting tools.
• Higher diesel prices.

Industry bodies also argue that:

Granite GST = 18%

Tiles GST = 5%

creating a competitive disadvantage.

Circular Economy: Turning Waste into Wealth

One promising avenue for revival lies in granite waste utilisation.

Potential Products

• Manufactured sand.
• Premium tiles.
• Artefacts.
• Sanitaryware.
• Bath fittings.
• Construction materials.

Some enterprises in Khammam have already demonstrated commercial success using discarded granite blocks and slurry.

Regulatory Challenges

Despite slowing demand, authorities recently uncovered:

• Fake firms.
• Fabricated e-Way bills.
• Alleged tax evasion networks linked to black granite transportation.

The episode highlights the need for stronger compliance and monitoring mechanisms.

Government Response

Measures undertaken include:

• No increase in royalty and seigniorage charges.
• Release of pending subsidies.
• Restoration of older measurement methods.

Industry stakeholders additionally seek:

• Liberalised lease policies.
• Better rail connectivity to Kakinada Port.
• Promotion of Tan Brown granite in public infrastructure projects.

Way Forward

• Diversify export destinations beyond China and West Asia.
• Improve rail-port logistics and freight infrastructure.
• Encourage granite waste-based industries.
• Rationalise taxation and leasing policies.
• Promote domestic procurement of locally produced granite.
• Invest in technology, value addition, and market diversification.

Conclusion

The crisis in Telangana's granite industry demonstrates how regional economies are increasingly influenced by global geopolitical developments. While rising fuel costs, supply-chain disruptions, and weak export demand have triggered the current downturn, structural issues such as quarry policies, market concentration, and raw material shortages have amplified its impact. Building resilience through diversification, value addition, and policy support will be crucial for safeguarding livelihoods and ensuring the long-term sustainability of this strategically important industry.