Surat, India's largest man-made fabric (MMF) hub to be adversely affected by the decision of Government of India's finance ministry to impose definitive anti-dumping duty on purified terephthalic acid (PTA) imports from China, Iran, Taiwan, Indonesia and Malaysia.
As per the government notification, the PTA imports from China, Iran, Taiwan, Indonesia and Malaysia will attract duty ranging from $85.67 per tonne to $168.76 per tonne. The high import duty will prevent small spinners in Surat and other places in the country from importing PTA, main raw material for manufacturing of yarn.
The anti-dumping duty on PTA imports from foreign countries will create a monopoly of big spinning houses and that small and medium-scale spinners in Surat and Mumbai will have to suffer, according to industry sources.
This will further escalate yarn prices by Rs 3 to Rs 5 per kilogram in the domestic market, thereby increasing the final cost of the polyester fabric manufactured in Surat.
Surat Art Silk Cloth Manufacturers' Association (SASCMA) secretary Dinesh Zaveri said that there is an urgent need for anti-dumping duty on fabrics and not PTA imported from China and other foreign countries. The government's decision will benefit a couple of giant industries that manufacture yarn. The anti-dumping duty on PTA will certainly monopolize yarn manufacturing business and big industries will rule the prices of yarn in the domestic market. The prices of yarn will be increased by Rs 3 to Rs 4 per kilogram.
The domestic spinners in the industry predicted that the anti-dumping will crush over 20,000 small and medium polyester fibre and polyester yarn manufacturers in the country. This will end competition within the industry, which will be totally inequitable for the finished product Indian consumers.
According to Federation of Gujarat Weavers Association (FOGWA) president Ashok Jirawala, the anti-dumping duty on PTA will have a cascading effect on weavers and end users as well. The polyester fabric is going to become uncompetitive against Chinese import of fabrics. The industry will face hard days in the coming months.
PTA - a white, free flowing crystalline powder - is the primary raw material for the manufacture of polyester chips, which in turn is used in a number of applications in textiles, packaging, furnishings, consumer goods, resins and coatings.
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