War Tremors: Indian Ceramic Tiles Industry Faces Revenue Dip Amid West Asia Conflict

The Indian ceramic tiles industry is bracing for a 1-2% revenue decline this fiscal year due to West Asia's conflicts affecting production and exports. Critical logistical and supply chain challenges have impacted exports and raw material supplies, threatening the industry's profitability and production capabilities.

The Indian ceramic tiles industry is expected to see a revenue decline of 1-2% this fiscal year, marking the second consecutive fall, as the ongoing conflict in West Asia disrupts production and exports, according to Crisil Ratings.

The turmoil in West Asia has led to logistical challenges and supply-chain realignments, significantly impacting exports. The Middle East, which accounts for 15% of ceramic exports, is experiencing delivery disruptions, escalating freight and insurance costs as the Strait of Hormuz closure complicates trade, the agency reported. The consequence is a forecasted 6-7% decrease in export revenue.

The supply-side has also been hit, with shortages in liquefied natural gas and propane — critical raw materials comprising 35% of production costs — causing many ceramic plants to reduce operations or completely shut down, Crisil Ratings indicated. This scenario is anticipated to stall domestic market growth to just 4-5% compared with earlier projections of 7-8%, exerting further pressure on operating profitability.