Textile makers face pressure of cheap Chinese import

Urges the govt to remove 12.5% tax on yarn

Indian textile manufacturers face the pressure of cheap import of synthetic yarn from China. They blame the 12.5 per cent excise levy on the product for not being able to compete in price, and have urged the government to remove it.

In the first 11 month of 2014-15, staple fibre import rose to $197 million as compared to $149 mn in the same period of 2013-14, showed data compiled by the Synthetic & Rayon Textile Export Promotion Council (SRTEPC).

In the past two years, Chinese cost of manufacturing has gone up — wages, energy and financing. Consequently, their export share has gone down by 10-12 per cent. However, the capacity additions made in two years have resulted in excess availability of synthetic yarn and fibre, says the industry here, alleging this being dumped in India.



“The only way forward, therefore, is to reduce excise duty on all synthetic textile raw materials and fabric, to enable Indian producers to grab the global opportunity vacated by China,” said Anil Rajvanshi, chairman of SRTEPC.

The Council says the 12.5 per cent levy makes us uncompetitive in global markets, too, with China’s vacated space taken by Bangladesh and Vietnam. Apart from fibres, filament and spun yarn import of $825 million, India also imported synthetic fabric worth $780 mn in 2014-15.

Filament yarn is woven directly for synthetic saris and other dress material, an item of mass consumption. Pruducers here are in the small, medium and large segments. “Rising import has resulted in about 30 per cent of looms closing in major producing centres like Surat. Thus, the industry needs urgent attention,” said a senior official from the sector.

It is a mass commodity product and thus, sold at cheaper prices as compared to staple fibre which is mixed with cotton and viscose to produce good quality suiting and shirting etc. Thus, PSF is sold at import parity. In India, out of 4 million tonnes of polyester produced, 3 million tonnes is filament yarn.