SOUTH ASIA MINERALS YEARBOOK—1988localities. Andhra Pradesh, Karnataka,
Tamil Nadu, Gujarat, Madhya Pradesh, and Rajasthan included the majority
of cement plants. 
 The impressive growth of the cement industry followed partial decontrol
in 1982, which initiated a notable surge of investment from private-sector
sources, some completely new to the industry. Driven by a demand that was
continually ahead of supply, the industry utilized modern technology, expanded
capacity, and increased both production and productivity per worker to the
optimum for existing price levels. By 1988, after the establishment of many
new miniplants (100 to 200 tons per day) and so-called tiny plants (20 to
100 tons per day), cement was available off the shelf. The vigorous black
market in cement of 1982 had vanished, and the free flow of newly produced
cement to the market resulted in lower prices, which created new problems
in reducing production costs. Near the end of the fiscal year in early 1989,
all controls on cement production and distribution were removed. New technologies
were being studied and adapted and a more productive use of labor was mandated.

 While the industry paused to allow demand to take up the slack (thought
to amount to as much as 4 million tons), it was clear that further expansion
would be required through the next decade or two. The per-capita consumption
of cement in India was 46 kg per year, quite small compared to 240 kg in
the United Kingdom, about 330 kg in the United States, 380 kg in France,
and 560 kg in Japan. The world average per-capita consumption was thought
to be about 200 kg per year; the probability was that India would need to
expand its capacity to 100 million tons per year by the year 2000, thus affording
the use of concrete for roads, canal linings, and prefabrication of construction
units and modules.3° 
 
 Fertilizer Materials.—Production of nitrogenous and phosphatic
fertilizers
forged ahead during the year, both 
achieving new highs. India ranked fourth in the world in the production and
consumption of nitrogen fertilizers and sixth in phosphates. After more than
3 years of drought, widespread rains stimulated consumption of all fertilizers,
which in turn promoted solid increases in production. The successful monsoon
season relieved a burden of high stocks and low prices that characterized
poor growing conditions. It also relieved the tendency of the fertilizer
industry toward stagnation, as evidenced by the forced discounting of sales
to buyers, shrinkage of investment from the private sector, and questions
concerning the advisability of any further increases in capacity. 
 Still relying heavily on imports of phosphate, with undesirable consequences
for foreign-exchange reserves, India witnessed renewed large-scale buying
by China. This latter country's absence in the world market the previous
year had seriously affected suppliers by leaving them with no buyer for their
excess production. Phosphoric acid producers raised prices sharply at the
end of 1988, causing the delivered price to India to climb from $425 to $480
per ton of phosphorus pentoxide. The Indian Ministry of Finance thereupon
refused to allot monies for the purchase of phosphoric acid for the first
one-half of 1989, causing confusion in the international market. As the two
most populous countries in the world, China and India jointly accounted for
65% of phosphate fertilizer consumption in Asia in 1988. Given this volume,
each is critical to the stability of the international market, so that the
implications of these swings in purchasing policy were far from clear.3'
It was expected that much more would be heard from Government and industry
on the problem of India's imports of phosphate, and especially the negotiation
of price. 
 
 Gem Stones.—Although production of combined industrial- and gemquality
diamonds dropped 11 010 from a total of 16,484 carats in 1987 to 14,613 
carats in 1988, overall activity in diamond production, cutting, and polishing
increased significantly. Gem and jewelry exports, at nearly $2.66 billion,
were about 65°lo higher than in the previous year and were, once
again,
the leading foreign-exchange earner. During the year, India imported roughly
$2.181 billion worth of uncut diamonds and other precious stones for cutting
and polishing, thereby adding more than one-third to their value (versus
an added-value rate of 25°lo in Israel)32 and affording employment
to
1 million skilled and semiskilled workers. In 1988, India processed 7001o
of all diamonds used in jewelry and clearly intended to maintain this position;
special diamond-cutting tools could be imported freely for the application
of new technology at the cutting centers around Bombay and Surat. Indian
cutting concentrated on the small diamonds not amenable to mechanized processing,
in which Israel is the world leader. 
 Tax raids by the Government of India on the diamond-cutting centers toward
the end of FY 1988 resulted in protest "close-downs" of the entire
diamond
trade for 5 days, followed by vows to close every Thursday until problems
with the tax authorities could be resolved. Because these closures disrupted
a booming yearend market, final export statistics for the year vary somewhat
according to source. The dollar values expressed above represent an approximate
median. 
In Orissa, the State government promulgated a new bill to stop the illegal
mining and sale of precious stones that was rampant in Bolasngir, Kalahandi,
and Sambalpur Districts. Under the bill, a license would be required to possess,
store, sell, or trade any mineral including precious, semiprecious, and uncut
stones. The act was aimed at illegal traders of Rajasthan, Gujarat, and Andhra
Pradesh who have exploited tribal people and caused a loss of revenue to
the State. Orissa Mining Corp. was planning to set up new pur371