Hope Arises for the Morbi Tiles Cluster as Anti-Dumping Duty Gets Eliminated by GCC Countries

The Gulf Cooperation Council (GCC) countries have reportedly withdrawn the anti-dumping duty on ceramic tiles that are exported from India. This change is expected to boost the ceramic industry in Morbi. Here is a detailed report by SURFACES REPORTER (SR).

Ceramic tiles had been earlier made a part of the FTA negotiations during the recent signing of the FTA between India and the UAE. Additionally, the anti-dumping duties on the import of ceramic tiles from India to the UAE had also been removed. The anti-dumping duty on ceramic tiles earlier had been 41.8 per cent, which was as high as 106 per cent for new companies. The impact of the duty on the import of Indian ceramic tiles into the GCC countries, especially in Saudi Arabia, had become more visible from 1HFY21. The Morbi ceramic association had requested to work something on the duty as it was hurting the Indian ceramic industry’s interests to enter the Gulf market as it cleared way for China. Reportedly, industries in Morbi made a representation before Lok Sabha MP Mohanbhai Kundariya. He further took the matter to the Central Government where the government signed a foreign trade agreement with the UAE government.

The removal of anti-dumping duty will reportedly benefit the Morbi region. The Indian tile exports to the UAE have been on the rise in the past four years with export quantum increasing from Rs 3.5 billion in FY18 to Rs 6.6 billion in FY22 (4 yrs. CAGR – 18 per cent) and from Rs 5.2 billion in FY20 to Rs 6.6 billion in FY22 (2 yrs. CAGR – 13 per cent) even after the announcement of anti-dumping duty by GCC countries.

As per media reports, except for Saudi Arabia, India’s exports to the rest of the five GCC countries had increased from Rs 11.5 billion in FY18 to Rs 19.9 billion in FY22 (4 yrs. CAGR – 15 per cent) and from Rs 15 billion in FY20 to Rs 19.9 billion in FY22 (2 yrs. CAGR – 15 per cent). That said, Saudi Arabia – the second-largest importer of the GCC countries – holds a strong position for India and is further expected to witness massive investments in construction activities in the coming five years. However, due to the imposition of anti-dumping duty, Indian exports have considerably fallen from Rs 21.8 billion in FY20 to Rs 9.2 billion in FY22. Additionally, with regard to the GCC market, the overall Indian exports have fallen from 43 per cent in FY18 to 23 per cent in FY22 as Indian tiles are being exported to many other countries.

Many experts have predicted that the construction market in the GCC countries to see ~6.5 per cent CAGR over 2022-27 with Saudi Arabia and the UAE to lead in the investments. However according to Consultancy-me.com, more recently Saudi Arabia started to ramp up its tendering on Public Investment Funds (PIF) Giga project programme, on the USD 500 billion Neom city project, Red Sea, Diriyah Gate and Qiddiya developments to boost its tourism and real estate.

Image credits: Wallnut (for representational purpose)

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