Cleared of Dumping, Taxed on Gas - and Then the Gas Ran Out

The petitioners asked for 328 to 489 percent. The US Department of Commerce found 0.00 percent. On the question of whether Indian ceramic tile manufacturers were selling below fair value in the American market, the answer was clear: they were not.

And yet a duty order exists, has been in force since June 2025, and applies to every Indian tile manufacturer shipping to the United States. The reason takes about five minutes to explain — and it is worth understanding precisely, because the same legal instrument is now being aimed at Indian tiles from Vietnam, because the Gulf states renewed a far heavier set of duties in April 2026, and because the subsidy that triggered the US measure has since been overtaken by events that would be difficult to script.

India cleared the dumping test. It failed the subsidy test. And the thing it was found to have been subsidised on — cheap gas from the Gujarat state government — has since become a commodity so expensive and scarce that hundreds of Morbi factories shut down entirely. A countervailing duty, by definition, is meant to neutralise an advantage. Whether the advantage still exists is the question that the mechanism of administrative review was built to answer.

What Actually Happened, In Order

Anti-dumping and countervailing duty are two different legal instruments. They are often confused in trade press reporting and, more expensively, in business planning. Understanding the distinction is the foundation for reading any of what follows correctly.

Anti-dumping law asks a single question: did you sell your product in the export market at a price lower than its fair value — which is typically its price in your home market? If yes, the margin of dumping is calculated and a duty is imposed to offset it. If no, no anti-dumping duty is warranted, regardless of how much market share you took.

Countervailing duty law asks a different question: did your government provide you with a financial contribution — a subsidy — that gave you a measurable commercial advantage in the export market? If yes, that benefit is calculated and a countervailing duty is imposed to neutralise it. The two investigations run simultaneously but independently, and a producer can pass one and fail the other.

That is precisely what happened to Indian ceramic tile in the United States.

The timeline runs as follows. On April 19, 2024, the Coalition for Fair Trade in Ceramic Tile filed both anti-dumping and countervailing duty petitions with the US Department of Commerce. The stated dumping margins in the petition ranged from 328.14 to 489.36 percent — figures that, if sustained, would have been commercially devastating for Morbi exporters. Commerce initiated both investigations on May 9 and 10, 2024. The US International Trade Commission issued an affirmative preliminary injury determination on June 3, 2024, allowing the investigations to proceed.

In September 2024, Commerce published its preliminary countervailing duty rates: 3.15 percent for Antiqa Minerals, 3.05 percent for Win-Tel Ceramics, and 3.08 percent as the all-others rate. These numbers were a fraction of what the petitioners had requested — but they were positive, meaning subsidy programmes had been identified.

The final determinations arrived in April 2025. On the anti-dumping side, Commerce found 0.00 percent for both mandatory respondents — a complete vindication of the Indian manufacturers on the dumping allegation. On the countervailing duty side, the final subsidy rates were set at 3.45 percent for Antiqa, 3.06 percent for Win-Tel and Theos Tiles, and 3.18 percent as the all-others rate. The final CVD determination was published as 90 FR 17036 on April 23, 2025.

On May 19, 2025, the ITC made its final injury determination. Importantly, it found threat of material injury to the US industry — not actual, existing injury. This is a legally meaningful distinction: the ITC was saying that if imports continued at these levels with the benefit of the identified subsidies, injury would result. It was not finding that the US industry had already been materially harmed. The countervailing duty order came into force on June 16, 2025.

The Scale That Made India a Target

To understand why a petition was filed at all, the trajectory of Indian tile exports to the United States needs context. In 2013, India shipped approximately 344,000 square feet of ceramic tile to the US. By the end of 2023, that figure had reached approximately 405 million square feet. India held roughly 20.3 percent of total US tile imports by the time the petition was filed.

The proximate cause of this acceleration was the US anti-dumping action against Chinese ceramic tile. In 2020, Commerce imposed anti-dumping and countervailing duties on Chinese ceramic tile at rates of 229.04 to 356.02 percent. Chinese import share collapsed, falling to approximately 0.4 percent in 2020. Indian exporters, already competitive on price and quality, filled the resulting vacuum. Volume jumped 42.6 percent in 2022-23 alone.

The US case against Indian tiles was, in structural terms, a consequence of the case against Chinese tiles. India benefited from being the alternative. It then became large enough to be targeted itself. This is the trade remedies cycle that Morbi manufacturers should recognise as a recurring pattern rather than a one-off event.

The Gas Subsidy — and Its Disappearance

The subsidy programmes that Commerce identified in its CVD investigation included the Gujarat state government’s provision of natural gas at rates below adequate remuneration. In trade remedies terminology, LTAR — less than adequate remuneration — is a specific legal category of subsidy, defined as a government providing a good or service at a price lower than what a private market would charge. Commerce constructed benchmarks to calculate the benefit and applied adverse facts available to the State Government of Gujarat in doing so. The Export Promotion Capital Goods Scheme was also among the programmes examined.

The irony of what followed would be difficult to script. Gujarat Gas issued a force majeure declaration on March 6, 2026, cutting industrial gas supply to Morbi by 50 percent. India’s Natural Gas Supply Regulation Order of March 9, 2026 placed household consumers ahead of industry in the allocation queue. Propane, the alternative fuel Morbi factories turned to, moved from roughly ₹55 per kilogram to ₹100 to ₹120 per kilogram — more than double. More than 400 of approximately 600 Morbi manufacturing units idled by April 2026. Gujarat Gas subsequently raised its Morbi rate to ₹46.05 per standard cubic metre, pushing remaining units toward propane regardless. As we documented in our coverage of the Morbi gas crisis, this was the most severe production disruption the cluster had ever experienced.

The export consequences were immediate and dramatic. Morbi’s Q1 FY27 exports fell 70.1 percent year on year — from $616.78 million to $184.19 million. US shipments specifically fell 69.9 percent, as we covered in the export shift piece. The gas supply disruption, not the 3.18 percent countervailing duty, was responsible for essentially shutting down Indian tile shipments to the US in early 2026.

A countervailing duty is designed to neutralise a subsidy advantage. The question that follows logically is: if the subsidised input — cheap gas — has become prohibitively expensive, or has simply been cut off, does the original subsidy calculation still reflect the actual benefit received? This is not an argument for removing the duty. It is a description of the mechanism that exists to test it. The standard instrument for addressing this is the administrative review, which any interested party may request annually. The first annual review of the June 2025 CVD order would be available to request by approximately June 2026. Whether any party has done so is a matter of public record with the Department of Commerce.

What Is Happening in Other Jurisdictions

The US CVD order is not the only trade measure bearing on Indian ceramic tile exports, and it is far from the heaviest. Four other actions are relevant, at different stages of development.

The Gulf: the largest barrier, renewed this year

The measure with the greatest commercial weight sits in the Gulf, and it received almost no attention in India when it was renewed. The GCC Secretariat General initiated an anti-dumping investigation into ceramic and porcelain tiles from China, India and Spain in November 2018, following a complaint filed by Saudi Ceramics Co. In June 2020, the GCC Industrial Cooperation Committee approved definitive anti-dumping duties against imports from China and India ranging from 17.6 percent to 106 percent of CIF value, depending on the exporter. The investigation into Spanish imports was terminated without duties. The measures took effect on June 6, 2020 for a five-year term.

In March 2025, the GCC’s Permanent Committee for Combating Harmful Practices in International Trade accepted a complaint and initiated a sunset review. In April 2026, the definitive duties on Chinese and Indian ceramic tiles were extended for a further period.

The commercial significance of this is difficult to overstate, and it intersects directly with the gas crisis. The Gulf and wider Middle East are among Morbi’s most important export destinations, and those were precisely the markets that collapsed hardest in Q1 FY27 — exports to Iraq fell 98.2 percent, to Oman 94.1 percent, to Saudi Arabia 92.6 percent and to the UAE 86.5 percent. Indian exporters returning to those markets as gas supply normalises will be returning to duties of up to 106 percent that were renewed while the factories were idle.

European Union

The European Union has had definitive anti-dumping duties on Indian ceramic tiles since Commission Implementing Regulation (EU) 2023/265 of February 9, 2023. Unlike the US outcome, the EU case was an anti-dumping rather than a subsidy investigation. The Commission found that Indian producers were selling below fair value in the European market, causing injury to EU producers — mostly small and medium-sized enterprises employing around 55,000 people, concentrated in Spain, Italy, Poland and Portugal. The duty rates on Indian exporters range from 6.7 percent to 8.7 percent; Turkish exporters were assessed at 4.8 percent to 20.9 percent.

One Indian exporter escaped entirely. The Lavish Group — comprising Lavish Granito, Lavish Ceramics, Lakme Vitrified, Liva Ceramics and, following subsequent amendments, Silk Ceramics and Luxgres Ceramica — is expressly excluded from the duty. The measures carry a five-year duration, making them subject to an expiry review around February 2028 unless the EU industry requests renewal earlier.

Vietnam

Vietnam’s Ministry of Industry and Trade initiated anti-dumping case AD23 on August 18, 2025, through Decision No. 2333/QĐ-BCT, targeting certain ceramic and porcelain tiles imported from India. The period of investigation runs from July 1, 2024 to June 30, 2025, and interested parties had until early November 2025 to register. Under Vietnamese trade remedies law, provisional duties may be imposed within 90 to 180 days of initiation and a final ruling is due within 12 months, extendable to 18 — placing the outer deadline at approximately February 2027. As of the time of writing, no public announcement of a preliminary determination in AD23 has been confirmed.

Vietnam imported approximately $60.75 million in Indian ceramic products in 2024, making it a meaningful but not dominant export market. The commercial significance of an adverse AD23 determination would depend heavily on the duty rates ultimately imposed.

India’s own measures

India itself maintains anti-dumping duties on glazed and unglazed porcelain and vitrified tiles with less than 3 percent water absorption imported from China. Following a sunset review initiated in January 2021 by the Directorate General of Trade Remedies — requested jointly by the Gujarat Granito Manufacturers Association, Indian Council for Ceramic Tiles and Sanitaryware, Morbi Ceramics Association and Sabarkantha District Ceramics Association — the duty was continued through Notification No. 09/2022-Customs (ADD) dated February 24, 2022, at a rate of USD 1.87 per square metre for a further five years.

That five-year term expires in February 2027. A further sunset review would need to be initiated before then if the domestic industry wants the duty maintained — a point worth noting for anyone tracking the domestic competitive landscape into FY28.

India protects its domestic tile market with precisely the same instrument being used against it in the US, the EU and the Gulf. This is not hypocrisy. It is standard trade practice, available equally to all WTO members. The instrument’s legitimacy does not depend on which country is using it. It depends on whether the legal threshold — dumping or subsidisation causing or threatening injury — has been demonstrated through a proper investigation.

What the Trade Actually Needs to Understand

For Morbi exporters and their commercial partners, four clarifications are worth making explicitly, because conflation of these issues is costly in business planning.

First, not all trade barriers are equal, and the loudest is not the largest. The US countervailing duty is approximately 3 percent. The EU anti-dumping duty is under 9 percent. The GCC duty reaches 106 percent. An exporter planning market entry or re-entry should be weighting these very differently, yet the US case has received disproportionate attention in Indian trade coverage simply because the petition asked for a headline-grabbing number.

Second, the existential threat to Indian tile shipments to the US in 2026 was the gas crisis — fuel costs, production shutdown and freight — not the tariff. A duty of roughly 3 percent on a product exported at single-digit dollars per square metre adds cents per square metre. A doubling of propane costs adds considerably more. The two events happened within twelve months of each other and should not be conflated.

Third, for domestic RSMs and dealers, the relevant consequence of export disruption is the domestic one. When Morbi cannot sell abroad — whether because of a gas crisis or a duty order — that production capacity competes on Indian dealer shelves. The months of peak Morbi export disruption in early 2026 coincided with the period of maximum domestic supply constraint and price increase. Any recovery in export capacity as gas supply normalises will redirect some volume back to export markets and ease domestic supply pressure. This is the export-domestic see-saw that makes tracking the trade measures environment useful for field sales teams, not just for export managers.

Fourth, for manufacturers, the anti-dumping finding is commercially important beyond the immediate case. The US Commerce Department found, on the basis of a formal investigation with mandatory respondents, that Indian ceramic tile was not sold below fair value in the American market. That is a documented, adjudicated position that can be cited in any future anti-dumping proceeding in any jurisdiction. In Vietnam’s AD23, Indian manufacturers face an anti-dumping allegation. The US finding is relevant precedent — not binding, but useful — in demonstrating that Indian tile pricing practices have been examined and found compliant.

Trade cases, once opened, tend to proliferate. India went from being the solution to the China tile problem in the US to being the subject of investigation itself within three years of filling that vacuum. The pattern is consistent across global tile trade. The jurisdictions watching the US, EU and GCC outcomes will draw their own conclusions. Understanding the difference between what happened on dumping and what happened on subsidy is the starting point for any informed response.

Cleared of Dumping, Taxed on Gas – and Then the Gas Ran Out