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Journalism of Courage
Just over a week after the government ordered the rollback of over a dozen Quality Control Orders (QCOs) consisting of chemical intermediates, synthetic fibres and polymer to ease stress on the textile manufacturing value chain, the anti-dumping arm of the Ministry of Commerce and Industry, the Directorate General of Trade Remedies (DGTR), has launched a probe into Polyester Textured Yarn (PTY) originating from China.
The largest polyester manufacturers in India, Reliance Industries Ltd and Wellknown Polyester Ltd, are among companies that had filed an application seeking the initiation of an anti-dumping probe concerning polyester imports, alleging that polyester originating from China has caused material injury to the domestic industry. China is the largest manufacturer and exporter of PTY.
Meanwhile, the representatives of the downstream industry expressed frustration, stating that an anti-dumping duty on the input material will make PTY more expensive and hurt the manufacturers, adding that the benefits of the rollback of QCOs could be nullified.
The DGTR said that the volume of imports from China has increased in both absolute and relative terms, and that the goods exported have suppressed the prices of domestic manufacturers. “The applicants are in losses and are incurring cash loss. Further, the applicants have earned a negative return on capital employed,” the DGTR said. Pointing to the restriction in imports through the use of QCOs, particularly on polyester fibre, Niti Aayog had said that, due to challenges faced by global suppliers in obtaining BIS certification, the implementation of QCOs has, in effect, led to “greater concentration among domestic suppliers in some sectors, giving them the ability to raise prices above global levels”.
“For instance, polyester fibre, yarn and some steel products command 15-30 per cent price premiums over global benchmarks, affecting the cost competitiveness of downstream industries in the international market. This is one of the main reasons for India’s declining share in global apparel exports despite the withdrawal of anti-dumping duties on select products,” the report said.
Niti Aayog added that QCOs have affected the competitiveness of export-intensive and employment- oriented sectors such as footwear and electronics. These sectors employ around 4.5 million people, and depend on imported intermediate materials that determine end-product performance and design flexibility.
“The QCOs on intermediate products critical for these sectors have disrupted access to items that are either not produced in India or are manufactured by very few suppliers,” the think tank said. As per the DGTR notification, the present application has been filed by Reliance Industries Ltd and Wellknown Polyesters Ltd. The application has been supported by Filatex India Limited, Madelin Enterprises Private Ltd, Garden Silk Mills Ltd, Indorama Synthetics (I) Ltd, and Sanathan Textiles Ltd.
