In what is seen as a provocative move, pushed by manufacturers across the wider Arabic region, Indian ceramic tile producers have received one of the severest jolt in recent history. In a move, that is going to have a very far reaching impact on Indian ceramic tile industry, the Gulf Cooperation Council (GCC) has confirmed that it has passed an interim/provisional order to impose antidumping duty ranging from 40% to 106% on ceramic products imported from India.
However, the council which takes care of political and economic interests of Arab nations such as Saudi Arabia, United Arab Emirates, Kuwait, Qatar, Oman and Bahrain has kept duty at 23% duty on Chinese products.
This move is expected to make Indian exports to GCC countries uncompetitive. Lower duties on Chinese imports into the GCC region will further add to the competition in export market for Indian producers.
Of the total annual production of worth around INR 450 billion of ceramic tiles in the country, nearly INR120 billion are being exported to more than 170 countries from Morbi based units. Approximately 30 to 40% of the total exports ( nearly INR 45- 50 billion in value) is being exported to Gulf countries, especially to Saudi Arabia.
Stakeholders from India’s biggest ceramic cluster have decided to make a representation before Gulf Cooperation Council (GCC) to bring anti-dumping duty on India’s ceramic products at par with their Chinese counterparts.
The new tax regime is going to be implemented from 11th November, 2019, according to Nilesh Jetparia, president of Wall Tiles division of Morbi Ceramic Industry. “We have represented our case with Prime Minister’s Office and concerned officials in commerce ministry.”
“If anti-dumping duty wouldn’t be brought on a par with the Chinese manufacturers, ceramic units in Morbi will have to bring at least 20% cut in production. It means there would be thousands of job cuts. About 400 odd ceramic units out are exporting to different countries across the globe. These units will have to dump their inventory in domestic market, which would intensify price-war in local market,” according to KG Kundaria, former president, Vitrified Tiles division, Morbi Ceramic Association.
Domestic demand in India has been languishing for past two years. Domestic consumption has registered very low growth rates in these two years. With the GCC anti-dumping duty, Indian ceramic tile industry is expected to register one of its worst years in 2020, if duty by GCC countries is not reduced.
Whether this is a definitive movement geared at providing China with a more welcome base in the region at a time when the latter is under huge pressure elsewhere, remains to be seen. One thing for sure is that India, so long a comfortable trading partner with the whole Arabian peninsula, has just seen its fortunes slashed by this punitive measure.
We await to see what 2020 will bring….
Happy new year everyone!
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