Freight train lowers cement prices in Kashmir

Srinagar, Oct 5: Two months into the freight train service to Kashmir, cement is arriving in the Valley faster, cheaper, and in greater numbers.

The cement prices have dropped by Rs 30 to Rs 35 per bag while national brands are now competing with local producers, giving consumers big savings and reshaping Kashmir’s construction market.

The train service, which crossed the Pir Panjal mountains to reach the Valley on August 9, has drastically cut freight costs and allowed national brands like Ambuja and UltraTech to compete directly with local manufacturers for the first time.

For years, Kashmir’s cement industry was dominated by nine local producers who thrived on lower prices and logistical advantages.

But the new goods train link has reduced transportation costs so much that national brands now sell at nearly the same rates as home-grown ones.

Waseem Raja, 40, an MBA graduate from Donipawa, Anantnag, who left his HDFC Bank job in 2019 to become a major distributor of Ambuja Cement in Anantnag, said the change has been transformational.

“Earlier, when we brought cement from Udhampur or Hoshiarpur, high freight costs made it hard for small customers to benefit. Now, we can deliver straight from the railway station, and every customer saves around Rs 30 to Rs 35 per bag,” Raja said.

Before August 9, Ambuja Cement cost between Rs 470 and Rs 480 per bag at the doorstep. “Now, it sells for Rs 435 to Rs 450. Freight reduction accounts for about Rs 35, and GST has come down from 28 to 18 percent,” he said.

The Northern Railways designated the Anantnag station as a goods depot on August 7.

Since then, around 9.5 lakh cement bags have arrived by train – about 7 lakh from Ambuja, 2 lakh from UltraTech, and the rest from Shree Cement.

Mushtaq Ahmad Kanue, another Ambuja distributor in Anantnag, said the drop in prices has spurred demand.

Two months ago, a cement bag billed at Udhampur at Rs 433 would reach Kashmir at Rs 510 after road transport.

Now, the same bag arrives by train at around Rs 400.

Traders say freight costs per cement bag have fallen from Rs 55 to Rs 90 by road to just Rs 10 to Rs 25 by rail.

Consequently, the national brand cement that once sold for Rs 480 to Rs 530 now trades at Rs 410 to Rs 440, nearly matching local brands.

“This has doubled our sales. People now prefer outside brands,” Kanue said.

The shift has unsettled local manufacturers, who are struggling to maintain their market share. “Earlier, local brands had a price advantage, but now we are almost at par,” said a dealer.

For consumers, the difference is substantial.

“I am building my house in Bijbehara, and the cost difference is huge. Earlier, I had to buy local cement at nearly Rs 480 a bag, but now I get Ambuja for around Rs 430. It’s saving me thousands of rupees,” said Manzoor Ahmad, a local.

According to the latest Economic Survey, the construction sector contributes 42.46 percent to Jammu and Kashmir’s Gross State Value Added and employs nearly 15 percent of the workforce.

Around 50,000 people depend directly or indirectly on the cement industry.

Kashmir’s nine operational cement plants – mostly in Pulwama district - dispatch about 600 truckloads daily, roughly 5000 tonnes.

But with cheaper freight and direct rail connectivity, industry insiders say the balance of power is shifting toward national brands.

“Had the Srinagar-Jammu National Highway not been shut, the sales would have been even higher,” Kanue said.

Two months in, the freight train to Kashmir has not only shortened distances but also reshaped one of the Valley’s biggest industries to the clear advantage of its consumers.·