The Tiles industry in India is marked by increased spending on infrastructure by Government, rapid urbanisation and consumer preference shift, which, in turn is promoting the demand for ceramic tiles in residential and commercial buildings across the country.
Tiles Industry in India 2020 | Sector
The size of the Indian tile industry in 2018 was estimated at ~1,145 million sq. meters compared to 1,080 million sq. metres in 2017, accounting for 8.7% of the global production. Over the last two years, the Indian ceramic tile industry encountered challenges from the economy in addition to the unorganised sector.
The ceramic tiles industry in India was estimated at Rs 35,000-40,000 Crores in 2019, recording single-digit growth. Nearly ~40% of the industry was organised, while 60% was largely unorganised comprising players from Morbi, Rajkot and other clusters.
- 0.6 Sq. m, the per capita consumption of tiles in India
- 4.0 Sq. m, the per capita consumption of tiles in China
- 3.4 Sq. m, the per capita consumption of tiles in Brazil
- 1.4 Sq. m, the per capita global consumption of Tiles
India is not only the second-largest producer of ceramic tiles in the world after China but also the second-largest consumer of ceramic tiles in the world after China with a consumption quantum pegged at 750 million sq. metres and accounting for almost ~6% of the world.
India is also the fourth-largest exporter of ceramic tiles with the export quantum pegged at 274 million sq. metres compared to 228 million sq. metres in 2017, accounting for a global share of 10%.
The industry is marked by increased spending on infrastructure by Government, rapid urbanisation and consumer preference shift, which, in turn is promoting the demand for ceramic tiles in residential and commercial buildings across the country. It is not just the new projects that drive the demand for ceramic tiles in the country but also increasing application of tiles in replacement and renovation projects.
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Further, the replacement market is expected to witness strong growth in the future, driving the growth of the ceramic tiles market of India. On the back of such optimism, the Indian ceramic tile industry is expected to grow at a CAGR of 8% over the next few fiscals.
Key demand drivers for Tiles industry
Housing sector – Housing shortage: According to Ministry of Housing and Urban Affairs, there was an affordable housing shortfall of approximately 10 million houses. With the government addressing this housing shortage, the ceramic tile industry is expected to receive huge traction.
Per capita consumption: The per capita consumption of tiles in 2018 was a mere 0.59 sq. metres in India compared to 3.95 sq. metres in China and 3.39 square metres in Brazil and the global average of 1.40 sq. metres, indicating the huge headroom of growth available.
Home extension and home improvement needs: In 2011, 41% of households were living in less than one-room homes and 53% households were in a good condition, implying a need for home improvement and home extension. Owing to this increasing growth in home extension, the ceramic tiles and sanitaryware industry has seen a sea change.
Hotel sector Hotel growth: The hotel industry in India is projected to grow to Rs 1,210.9 billion by 2023, expanding at a CAGR of ~13% between 2018 and 2023, on the back of high arrival rate of foreign tourists and business delegates once the world normalises.. This could further boost the ceramic tile and sanitaryware market in the country.
Commercial sector Office space: According to a Knight Frank India report, the country’s office leasing volume rose by 27% y-o-y to an all-time high of 60.6 million sq ft in 2019 on the back of a surge in leasing activity by information technology companies. This has helped boost the ceramic tiles and sanitaryware market in the country.
Shopping malls: India is set to >65 million sq ft of new mall spaces by the end of 2022, of which the top 7 cities comprise 72% share and the remaining 28% or 18.2 million sq ft is slated to come up in Tier 2 and 3 cities. This could widen the ceramic tile and sanitaryware market in the near future.
Policy Related to Tiles Industry in India
Pradhan Mantri Awas Yojana (PMAY-Urban): Under this initiative, the Government aims to build 1 Crore houses by 2022, of which ~104 Lakh houses were sanctioned till date and >32 Lakh houses completed. This will drive the demand of tiles in the country for the next few fiscals.
Pradhan Mantri Awas Yojana (PMAY-Gramin): In the second phase of PMAY-Gramin, the Government assured to provide 1.95 Crore houses to eligible beneficiaries between 2019-20 and 2021-22 with amenities such as LPG, electricity, and toilets. This could boost the demand for ceramic tiles in the near future.
Global Ceramic Tiles Market
The global ceramic tiles market was pegged at US$ 97 billion in 2019 and expected to expand at a CAGR of 9% between 2019 and 2029 to reach US$ 228 billion by 2029. A large share of the world production came from the Asia Pacific region with China being the biggest manufacturer of ceramic tiles in the world followed by India. Further, in terms of volume (million sq. ft.) the market is expected to expand at a CAGR of 7.6% between 2019 and 2027.
Tails ka Dilara banana chataha