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Increasing market share in tile exports market

A healthy uptick in exports has helped India become the world’s second-largest exporter (from 11th
in 2013). In fact, exports amount to 40% of India’s total tiles industry size. Ceramic tile exports posted
a robust 27% CAGR (by volume) over FY16-21, exhibiting Indian manufacturers’ increased focus on
catering to exports demand while maintaining competitiveness vis-à-vis other tile exporting nations.
Notably, the growth for Indian tile manufacturers came from market share gains from China in
countries and regions wherein anti-dumping duty (ADD) has been imposed on Chinese ceramic tiles
(e.g. the EU, the US, Brazil, Taiwan, Chile, Vietnam and South Korea).

15% YoY to 442 MSM. At the same time, global imports of tiles fell by ~35% YoY, accelerating market
share gains for Indian tile manufacturers.

We think the dynamics might not change much and Indian tile manufacturers would continue to
have an edge since the energy crisis facing the Chinese ceramic industry is essentially about pollution,
which is a serious and long-term concern, and cannot be wished away. In November–December
2021, when China battled excessive levels of air pollution, dozens of ceramic companies suspended
operations. And as China moves towards carbon-neutrality and switches from coal to gas, Indian
tile manufacturers are in a sweet spot having already moved to gas. They shall continue to enjoying
market share gains in exports market.

Reducing tiles exports from China Increasing tiles exports from India

1400 50.0 500 35.0
1200 40.0 400 30.0
(Sq. mt Mill) 1000 30.0 (%) (Sq. mt Mill) 300 25.0 (%)
800
20.0
600
400 20.0 200 15.0
10.0
10.0 100
200 5.0
0 - 0 -
2013 2014 2015 2016 2017 2018 2019 2020 2013 2014 2015 2016 2017 2018 2019 2020
China’s % of total % of total India’s % of total % of total
exports production exports exports exports production

Source: Ceramic world review, Edelweiss Research
Increasing furniture exports from India

In CY20, the global furnishing export market stood at USD262bn, of which only furniture exports

countries was 63% with China at top exporting goods worth USD31bn, followed by Germany and
Vietnam with exports of USD7.7bn and USD6.9bn, respectively.

India’s furniture exports were pegged at just USD0.9bn during 2020. That said, China’s export growth
is slower than growth of developing economies such as Vietnam and India (16% and 10% CAGR over
CY16–20, respectively). Since an anti-China sentiment is taking root across the world, India through
its Make in India push is not only seeing imports substitution, but also gaining market share in
exports market.

Edelweiss Securities Limited 67