Booming export market for tiles may encourage many Morbi tile manufacturers who had closed their units due to poor market conditions to reopen their units due to changing fortunes of the industry. There are nearly 50-60 such units which may soon be reopened to meet the increasing demand from robust export growth. This trend in a way indicates the improving health of tile industry in Morbi which was just a few months ago was fighting for its survival.
Apart from reopening of the closed units there are also talks of setting up of 50-60 new units to meet the increased demand. Experts are slightly concerned by this new development as they fear the repetition of 2016-18 trend when there was mad rush to set up new capacities. Most of the capacity expansion planned is in GVT segment.
Though September exports figures are not available, exports have seen robust growth during July-August period. Tile exports rose 15% yoy during this period and the unconfirmed trend reveal that September too might have recorded similar growth. However, it was a complete washout in April-May 2020 due to the COVID-19 lockdown when big question mark was raised about the survival of the tile sector in the region.
Indian tiles sector in general and Morbi cluster in particular have benefited in recent times as various countries have imposed anti-dumping duty on Chinese tiles and prevalence of anti-China sentiment owing to COVID-19. Further, traders have been increasing import share towards India to hedge purchases which too is contributing to exports growth.