Textile firms appeal against anti-dumping duty on key input, Pg12.

Key Highlights:

• MEG, a crucial input for polyester fibre, yarn, and filament, is 20% costlier due to anti-dumping duty.
• India imports around 40% of MEG requirements, mainly from Singapore, Taiwan, and Saudi Arabia.
• No new domestic MEG production projects are planned for the next 3–4 years.
• Textile sector leaders argue ADD makes Indian Man-Made Fibre (MMF) products less competitive.
• The industry has appealed to the Textiles, Finance, and Chemicals Ministries to intervene.
• GST on MMF yarn and fabrics has already been reduced to support the sector, but raw material cost remains a bottleneck.

Detailed Insights:

• Impact on MMF Sector:
  • ADD increases input costs, reducing the global competitiveness of Indian MMF-based textiles.
  • Rising raw material prices risk shifting demand toward imports rather than domestic manufacturing.
• Import Dependence: India heavily relies on imported Purified Terephthalic Acid (PTA) and MEG for polyester production, as domestic production is insufficient.
• Economic Implications:
  • Higher MEG prices inflate costs for apparel, garments, and synthetic fabric producers.
  • The duty also discourages investment in value-added textile exports under the MMF segment.
• Industry Concerns:
  • ADD was initially imposed to protect local MEG producers, but limited domestic capacity makes it counterproductive.
  • Textile manufacturers advocate international price parity for MEG to sustain the growth of the polyester value chain.

Scientific/Technical Concepts Involved:

• Mono Ethylene Glycol (MEG): A petroleum-based organic compound used in polyester fibre, resin, and antifreeze; derived from ethylene oxide.
• Anti-Dumping Duty (ADD): A trade policy measure imposed to prevent foreign producers from selling goods below fair market value, protecting domestic industries.
• Man-Made Fibres (MMF): Synthetic textile fibres such as polyester, viscose, and nylon, increasingly important for India’s export diversification.