Gujarat: EU's anti-dumping probe to hit Morbi hard

RAJKOT: Already reeling under skyrocketing gas prices and high anti-dumping duty imposed by Gulf countries, the famed ceramic cluster of Morbi, has been dealt another blow to their exports.
Now, the European Union (EU) has initiated an anti-dumping duty investigation against India and Turkey tiles manufacturers following a complaint submitted by the European Ceramic Tile Manufacturers' Federation (CET), who claimed they are being hit hard by the imports from these two countries.
The EU trade body submitted evidence of how the sales of their products were adversely affected by India's import in European countries in the year 2020 during the peak of global Covid pandemic.
"The increase in market share of dumped and injurious Indian and Turkish imports took place even despite the Covid-19 crisis that resulted in significantly lower production of the Union industry in Q2 of 2020. Ultimately, the increase of Indian and Turkish imports caused the loss of market share by the EU industry and have suppressed prices in the EU, thereby leading during 2020 to significant loss of profits of 75%, loss of employment of 2%, a slump of investment by 40% and an overall worsening of the injurious situation of the Union industry," CET complaint states.
Morbi exports tiles worth Rs 3,500 crore to European countries annually, which may take a hit due to the step.
Accusing the two countries of price undercutting, i.e. selling the product in the export market at a reduced rate than the domestic market, CET said it had calculated India's undercutting of prices by 170%.
Price underselling means if a product doesn't add reasonable profit in cost of production, which is 22% to the product and selling it at a lower price.
A DGFT official explained: "There are 10-15 criterias to establish these things during investigation. For example, if we export to another country at a lower price, so did our exporters intentionally lower the price or they are using old technology that makes production costs less?. Exporting at a lower price does not automatically attract anti-dumping duty but if it harms the interest of domestic industry in the destination country, it will attract anti-dumping duty."
KG Kundariya, a leading exporter from Morbi said, "We are giving tough competition to the tile manufacturers in Europe. We are exporting good quality, large format and giving thousands of designs at a cheaper rate. We are providing them with a wide range of choice and that's why India's products are favourite in European countries."
There are around 300 units exporting to European countries like Spain, Italy, Poland, Romania, Hungary, the Netherlands etc.
Nilesh Jetpariya, another exporter, added, "After Gulf countries imposed anti-dumping duty, our export halved to those countries. We are already facing high production costs because of unprecedented gas prices. If the EU imposes, anti-dumping duty, it will adversely impact our exports."
Morbi units export their products in 150 countries including Spain, Italy, Mexico, Brazil and Turkey. The cluster produces wall tiles, floor tiles, vitrified tiles, polished tiles, twin charged tiles, sanitary wares, industrial ceramics and technical ceramics products.
According to exporters, China ceramic units are the is India's biggest competitor sin the world tiles market due to low production cost there.