MICRO, SMALL and medium enterprises (MSMEs) that make pipes have flagged an impending increase in irrigation and housing project costs after the Directorate General of Foreign Trade (DGFT) imposed a six-month restriction on imports of a key input used for manufacturing these, Suspension Polyvinyl Chloride (S-PVC) resin.
The DGFT measure came on July 24, after the Finance Ministry last year declined to accept the Commerce and Industry Ministry’s recommendation to impose an anti-dumping duty (ADD) on the item. Such duty recommendations from the Commerce and Industry Ministry are rejected by the Finance Ministry when “public interest” is involved. S-PVC resin is used across sectors, from irrigation pipes and conduits to electrical wires used in construction.
MSME operators say the restriction has already prompted major domestic manufacturers to raise the resin’s prices. “Prices before the notification were Rs 78 per kg if you bought from a Chinese supplier. The domestic manufacturer was selling it at around Rs 82 per kg. As soon as the notification came, the domestic manufacturer hiked the prices to Rs 93 per kg,” said Sharwan Kumar Kaler, Director at Rex Pipe and Cable Industries Ltd, and Vice President, Plastic Manufacturing Association, Rajasthan.
The impact is widespread. India’s PVC capacity is just 1.7 million metric tonnes (MMT) against demand of 4.7 MMT, a gap filled by imports from China, Japan, Taiwan, South Korea, Mexico and Indonesia. Reliance Industries is the largest domestic producer, accounting for 51% of capacity. Other players—Chemplast Sanmar, Finolex Industries, DCW Ltd and DCM Shriram—together hold 5-20%, according to rating agency ICRA.
“The material is already in short supply. Now, with the government taking such steps, domestic industries will feel the pain, and prices will rise in the consumer market. If raw material prices go up, finished goods prices will follow,” said Ajay Saboo, Executive Committee Member of the Federation of Indian Micro and Small & Medium Enterprises (FISME).
Demand for PVC resin grew at a CAGR of 6.2% between FY20 and FY25. In 2024-25, demand rose 11%, driven by government housing and water-supply schemes such as the Pradhan Mantri Awas Yojana and Jal Jeevan Mission.
Meanwhile, the Adani Group has announced plans to enter the sector, setting up a PVC plant in Mundra, Gujarat, through its subsidiary Mundra Petrochem Limited. The project began in 2021, but major equipment procurement and site construction were put on hold in 2023. Work on the Mundra project resumed in 2024, with an initial planned capacity of 1 million tonnes per annum, and commissioning expected by fiscal 2028.
Reliance Industries currently makes PVC via the oil-derived ethylene route and plans to expand capacity to 1.5 MMT per annum by 2026-27. Adani Group, by contrast, is building a 2 MMT integrated PVC complex at Mundra using the coal-to-chemical (calcium carbide) route, with the first 1 MMT phase expected to start production in FY 2027-28.
If Adani enters the PVC resin business, it would mark the first major petrochemical product in which Reliance and Adani compete directly in the Indian market. Industry experts say coal-based PVC production is cheaper because its economics are largely insulated from crude oil price swings.
Queries emailed to the Commerce and Industry Ministry, Adani Group and Reliance Industries (RIL) remained unanswered.
The DGFT notification sets a Minimum Import Price (MIP): S-PVC priced above $0.766/kg remains freely importable for six months, while anything below that is restricted (barring Export Oriented Units, SEZs and the Advance Authorisation Scheme).
This shuts out the cheapest suppliers—major exporters’ prices are in the $0.65-0.75/kg range, with China’s the lowest, according to a Global Trade Research Initiative (GTRI) report.
ExplainedHow supply gap affects user industry
Chemical sector advisor Ajay Joshi linked the dumping to two factors: nearly 70% of China’s PVC production uses the coal-based route, insulating it from oil and gas prices, and a domestic real estate slump has weakened Chinese demand.
“With housing projects slowing, demand for pipes, plastic products, and consequently, PVC has weakened significantly. As a result, Chinese producers have been dumping excess material into India, driving PVC prices down to around $700 per tonne,” Joshi said. ICRA had flagged similar dumping from China, Indonesia, Japan, South Korea, Taiwan, Thailand and the US, last year.
DCM Shriram defended the MIP as a floor, not a price-setter: “It only blocks distress-priced cargo from treating India as a dumping ground for their excess capacities… PVC resin is a small fraction of total project costs, and a six-month floor price cannot materially move project economics. The distress from dumping of PVC that the MIP addresses is real and well documented,” the company said.
The DGTR’s MIP follows an earlier investigation last year after which anti-dumping duties ranging from $22 to $284 per tonne were recommended on August 14, 2025, on imports from China, Japan, Taiwan, South Korea, Thailand, Indonesia and the United States.
Under Rule 18 of the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, the Ministry of Finance had three months to impose the duty through a customs notification. As no notification was issued by mid-November 2025, the DGTR recommendation lapsed.
A demand-supply gap of 70% for key input S-PVC resin means MSME players making pipes have to depend on imports. China and other countries sell this input at low prices, hurting the market of big S-PVC producers. The DGFT order gives some protection to the big local input producers, but hurts MSMEs which have to budget for an immediate input price hike. 
Share
