Indian ceramic tiles industry thrives domestically but struggles in export markets: ICRA report - World News Network

New Delhi [India], October 23 (ANI): The Indian ceramic tiles industry finds itself at a critical juncture, as a recent report by ICRA reveals contrasting trends in the domestic and export markets.
While the domestic sector remains strong, accounting for around 64 per cent of the industry’s revenue, exports are showing signs of weakness. This decline follows investigations initiated by the US Department of Commerce in May 2024 into ceramic tile imports from India, raising concerns about the future of exports in a highly competitive global market.
The industry’s export prospects are further threatened by a proposed anti-dumping duty (ADD) by the United States, which could disrupt export growth in the coming fiscal year.
According to ICRA, the potential imposition of anti-dumping duties, ranging between 328 per cent and 489 per cent, could significantly reduce India’s ceramic tiles export revenue. This follows an existing downturn caused by rising freight costs linked to the ongoing Red Sea crisis and sluggish residential markets in the US and Europe. In FY2024, the USA accounted for 9 per cent of India’s ceramic tile exports.
Chintan Lakhani, Vice President and Sector Head – Corporate Ratings at ICRA, commented, “ICRA expects exports to contract by approximately 8-10 per cent in FY2025, primarily due to the likely imposition of ADD in the USA and continued weakness in Europe’s residential markets.”
He added, “The decline could be even steeper if the Red Sea crisis persists. Exports to Europe and the Americas have already been affected in recent quarters by rising logistics costs, which have undermined competitiveness. Although freight rates have eased somewhat, the overall logistics costs remain higher year-on-year, continuing to dampen export demand.”
Despite these export challenges, the domestic market remains resilient, supported by positive trends in the real estate sector.
ICRA projects overall revenue growth for the ceramic tiles industry of 7-9 per cent in FY2025, driven largely by domestic demand. However, exports are expected to remain a drag on the sector’s performance in the short term.
Capital expenditures in the industry are expected to decrease, from 8-9 per cent of operating income in FY2023 and FY2024 to below 7 per cent in FY2025.
Operating margins are forecast to stay stable at around 11-12 per cent in FY2025. However, these margins face pressure from increasing competition and an oversupply in the domestic market, which may limit pricing power and compress profitability. (ANI)

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