High Court stays exemption to Chinese firm: anti-dumping duty

Court admits petition by tile manufacturers

The Gujarat High Court has admitted a writ petition by the Gujarat Ceramic Floor Tiles Manufacturer's Association (GCFTMA) against the Central government notification, exempting a China-based company exporting vitrified and porcelain tiles to India through Prestige Trading, UAE, from paying anti dumping duty.

The High Court has passed an interim order to stay operation of the New Shipper Review until the disposition of the petition.

The stay order in the Special Civil Application 9047/2004 by the Gujarat High Court will come into after four weeks of the order, which was issued on October 5.

During the period when the stay operates, the company will not be permitted to dump vitrified or porcelain tiles in the Indian market and will be subjected to normal anti dumping duty (which is Rs 35 per square foot) which will have to be paid like all other importers of vitrified or porcelain tiles from China.

Commenting on the stay order, GCFTMA president Girish Pethapara said on Monday that this was a significant development.

"The notification exempting the new shipper from paying anti dumping duty had demotivated Gujarat's manufacturers who were already reeling under eroding prices in the domestic market because of dumping by China. The interim stay order has come as a relief for Gujarat's ceramic tile industry," said Pethapara.

Sabarkantha District Ceramic Association president Hasmukh Patel also expressed happiness over the interim stay order. "The interim stay order has come at a crucial time as a great relief to the local ceramic industry," he said.

According to the GCFTMA, tiles worth Rs 100 crore are being dumped into the Indian tiles market. Following rationalisation of import duties, dumping of tiles is expected to reach 300 crore by the end of the current fiscal, say tile manufacturers.

The Government of India accorded a New Shippers Licence to the producer Ms Nanhai Shangyuan Oulian Construction Ceramics Company Limited, China and exporter Prestige General Trading, Dubai, UAE, whereby they can bring tiles into India without paying anti dumping duty, as the exporting company received no subsidies from the Chinese government. This move was challenged by the GCFTMA.

The domestic tiles industry has been fighting off stiff competition from Chinese tiles and eroding prices for the past two years. Prices of vitrified tiles declined inthe first quarter of the current fiscal from Rs 60 per square foot to Rs 40 per square foot, while the overall price erosion in the past two years has been 50 per cent, say local tile manufacturers.

Tile manufacturers say that this price erosion is primarily because of sub standard tiles being dumped into the domestic market by countries such as China, Indonesia and Malaysia.