Just as things were seeming to return to normalcy, Indian tiles industry is in for another setback. This time it is on the export front as the Gulf Cooperation Council (GCC) is reportedly in the process of finalizing a temporary anti-dumping duty on Indian tiles. GCC is likely to impose anti-dumping duty of 15% for six months on Indian tiles by 5th Jan’19. Morbi Ceramic Association has already represented to Director General of Trade Remedies (DGTR) to make a case for them in GCC.
According to the figures available with the Commerce Ministry, the ceramic exports from Morbi cluster was to the tune of Rs 8000 crore in 2017-18 and Gulf countries accounted for around 35% of the exports. Indian tiles industry is already reeling under overcapacity situation along with pricing pressure and the latest development on exports front will only aggravate the situation at home. The antidumping duty by GCC will impact exports of Indian tiles to Gulf, part of which may be diverted to domestic market, putting supply glut in the market.
Gulf Cooperation Council (GCC) is a political and economic union of Arab states and g Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates (UAE) are its member countries. GCC will be imposing temporary anti-dumping duty on Indian tiles to address the substantial damage until it imposes the final anti-dumping duties which will cause serious threat to the export volumes of Morbi cluster along with other Indian ceramic players.
The Technical Secretariat of GCC had received various complaints from Saudi and Gulf based ceramic companies as they were facing severe pricing pressure (almost 25% decline in prices over last five years) and market share loss due to cheaper imports. GCC had started an anti-dumping investigation against imports of ceramic products of India, China and Spain in the first week of Nov’18. India provides incentives to tiles exporters under the two schemes – Merchandise Exports from India Scheme (MEIS) and Export Promotion Capital Goods (EPCG) under its foreign trade policy which the companies in Gulf countries consider to be heavily subsidizing the exports.