India is in consultations with Indonesia at the WTO on the latter’s proposal to extend safeguard duties on import of ceramic tile products from November, this year, for another two years, as it may further hit Indian exports of the item to the island nation, sources have said.
“India has requested for consultations with Indonesia at the WTO on its proposal to extend safeguard duties on ceramic tile products for another two years, from November 18 2024 till November 17 2026. It said that exchanging views with Indonesia on the extension of the measures was important as it had substantial trade interest in the export of the products concerned,” the source told businessline.
Safeguard duties are custom duties that can be imposed temporarily by a member country of the World Trade Organisation to protect a specific domestic industry from an increase in imports of any product which is causing, or which is threatening to cause, harm to the industry.
Duty on India
Indonesia proposes to impose safeguard duties of 12.72 per cent in the first year and then reduce it slightly to 12.44 per cent in the second year.
“While it is China that is primarily responsible for the continued inflow of ceramic tile products into Indonesia, the extension of safeguard duties beyond November 2024 for another two years will hurt Indian exports, which have already dwindled over the last few years because of the country’s safeguard measures,” the source said.
The initial definitive safeguard measure on ceramic tile products was imposed by Indonesia from October 12, 2018, until October 11, 2021, and was then extended for another three years from November 18, 2021, until November 17, 2024.
While India was initially amongst countries exempted from safeguard duties, Indonesia decided to remove India and Vietnam from the exemption list in August, 2020.
Dip in export since 2020
“There has been a steep fall in India’s exports of ceramic tile products to Indonesia since 2020, indicating that the shipments don’t pose a serious threat to domestic producers in the country,” the source said. Exports of ceramic products to Indonesia continuously fell from $76.08 million in 2019-20 to $26.08 million in 2023-24, according to government figures.
While China accounts for over 88 per cent of total imports of ceramic tile products to Indonesia, India’s share is just 2.77 per cent, per figures shared by the Indonesian government.
Although India’s export of ceramic products to Indonesia have taken a hit due to the safeguard duties, its total export of the item is increasing. In 2023-24, India exported ceramic products worth $ 3.04 billion, which was 18.59 per cent higher than exports, worth $2.57 billion, the previous fiscal.