Growing cracks in Telangana’s granite trade

For years, Rajendra Mohanty believed granite would guarantee him a steady livelihood. Today, cooking over a firewood stove outside his room on a factory campus in Kamanpur near Karimnagar, the 42-year-old migrant worker from Odisha is unsure what lies ahead. A slowdown triggered by geopolitical tensions in West Asia, rising fuel costs and weakening export demand has begun to ripple through Telangana’s granite industry, affecting everyone from quarry owners and factory operators to truck drivers and migrant labourers.

Karimnagar, often referred to as the ‘city of granites’, has long been a key driver of industrial activity in north Telangana. Home to around 250 quarries and over 290 granite cutting and polishing units, the district built its reputation on strong international demand for its signature Tan Brown variety. Today, however, the industry is struggling with supply-chain disruptions, escalating transportation costs and a slump in demand from key markets such as China and the Middle East.

According to official sources, only around 25% of the licensed quarries are currently fully functional. “We faced hard times during the COVID-induced lockdown in 2020 and are now experiencing a crisis-like situation,” says Mohanty, who has worked in Kamanpur for the past 12 years after migrating from Balasore in Odisha.

“Rising fuel prices have pushed up transportation costs while demand in international markets has slowed,” he adds, pointing to stacks of unsold granite slabs.

The crisis has seeped into everyday life. Mohanty says workers have switched to the chulha (firewood stove) due to LPG shortages and rising prices. Of the 30 migrant workers employed at the factory where he is employed, 13 have already returned to their native States since the latest downturn gripped the industry, he explains.

Factory owners are grappling with rising production costs due to the increase in prices of imported raw materials, even as demand for granite blocks and polished slabs weakens. Across Telangana’s granite belt spanning Karimnagar, Warangal and Khammam districts, many units have scaled down production and even reduced manpower, leaving thousands of workers facing an uncertain future.

Telangana is one of India’s leading granite-producing States, with Karimnagar renowned for globally recognised varieties such as Tan Brown, Coffee Brown, Maple Red, Red Rose and Blue Brown while Khammam and Warangal are known for premium black granite deposits, including the sought-after Jet Black variety. The wide range of commercially valuable granite found across the State has supported a vast network of quarries, processing units and export-oriented industries, with processed granite shipped to markets including China, Japan, Taiwan, the UAE, USA and Europe.

Karimnagar’s granite industry is heavily dependent on overseas markets. The district’s signature Tan Brown granite, once buoyed by strong international demand, is now facing demand volatility amid the fallout of the West Asia conflict.

According to industry figures, Karimnagar exported 56,730 cubic metres of granite blocks between April 1 and May 31, 2026, compared to a little over 3.35 lakh cubic metres during the whole of 2025-26. Demand for Tan Brown granite peaked in the late 2000s, especially around the Beijing Olympics, and it remains popular among buyers in China because of its affordability, availability and durability. Industry stakeholders, however, say current market conditions have impacted exports.

An industry in retreat

For decades, the deep black granite quarried from Khammam’s rocky landscape symbolised prosperity. Renowned for its uniform colour, durability and premium finish, Khammam Black Granite found its way into luxury homes, commercial complexes, hotels and monuments across India and overseas markets. The industry once generated an annual business volume of nearly ₹1,000 crore and provided direct and indirect employment to around one lakh people. Today, however, it is struggling for survival.

Across the industrial belts of Khanapuram Haveli, Mudigonda, Arempula, Pallegudem, Gopalapuram and Nelakondapalli, where granite processing units once buzzed with activity, silence has replaced the hum of cutting and polishing machines. Industry representatives say the downturn began around 2018-19 and deepened during the pandemic, driven by a combination of policy changes, rising costs, shrinking quarry activity and weakening international demand.

According to Khammam Granite Factory Owners Association president Patibandla Yugandhar, only a fraction of the industry remains fully operational. “While 170 units have completely shut down and 200 are running in a single shift, only around 100 are functioning at full capacity,” he says, referring to the nearly 470 slab units located within a 20-km radius of Khammam city. The shortage of raw granite blocks remains the biggest challenge. “Non-availability of the raw material is the main cause behind the decline of business,” Yugandhar adds.

Industry estimates suggest that around 3,000 workers have already lost their jobs due to unit closures and downsizing.

Entrepreneurs also point to changes in quarry lease allotment policies. The earlier system, Yugandhar says, encouraged exploration by allowing prospectors to identify deposits and obtain leases through a phased process: “But now open auction is in implementation for the sanction of leases. This is hurting prospective miners.”

Industry leaders contend that auction-based allotments and stricter eligibility norms have discouraged exploration and reduced the number of operational quarries. The district, which once had more than 200 quarries, now has fewer than 100 active operations. Government officials, however, maintain that lease allotments are governed by prescribed regulations and environmental safeguards.

For many entrepreneurs, the granite business has become financially unsustainable. Nallamothu Venkat Babu, who shut down his polishing unit two years ago, says the shortage of raw material forced him to exit the industry. “Since I am an agriculturist, I am now focussing on commercial crops,” he adds.

The impact extends beyond unit owners. A polishing unit equipped with four cutters can employ around 10 semi-skilled and unskilled workers, and closures have sharply reduced employment opportunities.

K. Venkat Reddy, who operates a unit exporting granite tiles to the US and Europe, says prolonged uncertainty has discouraged the younger generation from entering the business. “Our next generation is not showing interest to take up the reins from us due to losses mainly caused by the non-availability of raw material in sufficient quantities,” he rues.

Industry participants say financial distress is becoming widespread. Paramesh Reddy, treasurer of the association, points to rising diesel prices triggered by West Asia tensions as a major challenge. “Since quarrying, transportation and processing depend heavily on fuel, higher diesel costs have increased operational expenses for both quarry owners and polishing units, further eroding already thin margins,” he explains.

The crisis has also affected thousands of workers, particularly migrants who form the backbone of the polishing industry. According to Yugandhar, most workers in polishing units come from West Bengal, Rajasthan, Uttar Pradesh, Bihar, Odisha and Jharkhand while quarry labour is largely local.

The cost of decline

Workers in quarries and polishing units generally earn between ₹15,000 and ₹25,000 a month, but shrinking operations have reduced employment opportunities. “A fellow villager returned home due to non-availability of work,” says Sandip Mandal, a 21-year-old polishing machine operator from a village near Bishnupur in West Bengal.

Industry veterans say the sector is caught between rising input costs and weakening demand. While the price of raw granite has increased over the past 15 years, demand in some export markets has softened. At the same time, unit owners continue to bear fixed expenses regardless of production levels. “Whether you run the factory or not, the owner must pay the minimum power bill and prescribed fees,” says senior industry leader Narender. Some entrepreneurs argue that intermediaries and brokers often earn more than manufacturers, further squeezing profit margins.

Industry representatives believe one avenue for revival lies in better utilisation of granite waste. Quarrying generates large quantities of rejected blocks, slurry and earth, much of which is discarded despite its potential to be converted into value-added products.

Venkat Reddy advocates greater investment in research and development. “We can use the waste blocks of granite, slurry and earth for different by-products. But the government is collecting taxes on the waste,” he says.

Experts say granite waste can be processed into manufactured sand and other construction materials. One enterprise in Khanapuram Haveli has already demonstrated its commercial potential by producing artefacts, premium tiles, sanitaryware and bath fittings from discarded granite blocks. Despite the industry’s troubles, Khammam Black Granite continues to enjoy demand in domestic markets, particularly north India. However, that demand has also spawned regulatory challenges. Recently, authorities uncovered an alleged tax-evasion network involving the transportation of black granite through fake firms and fabricated e-Way bills. Investigations are continuing.

China demand dries up

Telangana Small Scale Granite Industries Association president Rayala Nageswara Rao says the sector has suffered huge losses following the disruption of exports to China since the COVID-19 pandemic. He notes that nearly 70% of quarries in the erstwhile Karimnagar district have shut down due to lack of demand from China.

Rao says applicants are now required to pay around ₹25 lakh per hectare to secure quarry leases. Black granite has a recovery rate of only about 10%, compared with more than 50% for coloured varieties such as Tan Brown, he adds.

According to him, Khammam district has around 700 slab and tile units, of which nearly 200 have closed. Welcoming the release of ₹20 crore towards pending subsidies and the revival of the old measurement method, he urges the government to liberalise lease rules and provide further support to the sector.

Government officials acknowledge the industry’s difficulties. Assistant Director of Mines and Geology, Khammam, R. Sainath says polishing units are under severe stress due to sluggish market conditions, rising production costs and inadequate availability of granite blocks. He estimates that around 130 polishing units in the district have shut down, but notes that the government has refrained from increasing royalty and seigniorage charges in an effort to support the industry.

For Amit, a polishing worker from Betul in Madhya Pradesh employed at a granite factory near Bavpet in Karimnagar, rising fuel prices and reduced production have taken a direct toll on household finances. “Earlier, I used to send ₹15,000 to my family. Now, I hardly send ₹10,000 back home,” he says, adding that even firewood has become costlier amid LPG shortages that have forced many workers to return to the traditional chulha.

“We pray that the geopolitical tensions ease so that supply chains are restored and our factory runs at full capacity,” he says.

The crisis reflects the export-dependent nature of Karimnagar’s granite industry. Raw granite blocks are largely shipped to China while polished slabs are exported to markets in the Middle East through Kakinada port in Andhra Pradesh. Industry stakeholders say bottlenecks in shipping routes and cargo delays linked to the West Asia conflict have led to increased freight costs and disrupted exports.

J. Praneeth Rao, president of the Karimnagar District Granite Industries Association, says rising shipping charges, a stronger US dollar and higher prices of imported cutting and polishing tools have forced many units to scale down operations. “The increase in transport charges due to fuel price hikes is taking a toll on our business, compelling us to operate only a single shift,” he says. Road transport costs have risen from around ₹2,800-₹2,900 per tonne to ₹3,300-₹3,600 per tonne while unit owners continue to struggle with bank loan repayments and electricity charges. Praneeth Rao says the industry directly and indirectly supports 30,000 to 40,000 families and argues that the 18% GST on granite places it at a disadvantage compared to tiles, which attract 5% GST.

Assistant Director of Mines and Geology, Karimnagar, S. Venkat Reddy says inflated ocean freight costs arising from the West Asia conflict have adversely affected granite exports from the district. A quarry owner from Bavpet, requesting anonymity, says the price of taper bits and other imported inputs used in drilling operations had increased three-fold, pushing up production costs by 10-15%. He also calls for improved rail-based logistics between Karimnagar and Kakinada port to reduce transportation costs.

Industry representatives have urged the government to encourage the use of locally produced Tan Brown granite in public infrastructure projects to support the sector’s revival.