BIS non-clearance halt import of viscose, polyester staple fibre

According to industry sources, even after around 20 days since its implementation, applications for BIS certification by foreign companies are still pending, causing a halt on imports of both VSF, PSF

The government’s decision to implement quality control order (QCO) for synthetic fibres, making the Bureau of Indian Standards (BIS) certification mandatory for viscose staple fibre (VSF) and polyester staple fibre (PSF) has now started hitting the importers of these products in India and helping domestic manufacturers.

According to industry sources, even after around 20 days since its implementation, applications for BIS certification by foreign companies are still pending, causing a halt on the imports of both VSF and PSF.

At present, India is the largest importer of viscose fibre in the World and depends on China, Indonesia and Spain for its imports, while on polyester staple fibre the country is dependent on China for imports. According to sources, foreign manufacturers are mulling legal options and may file a writ petition against the government of India, in its move to support local manufacturers. The step is likely to benefit Grasim Industries, the world’s largest producer of VSF with a monopoly in India, and domestic players including Reliance Industries in the PSF sector.  

 "No imports are happening. After official date of implementing the order (for VSF March 29 and PSF April 2), the companies that are manufacturing fibre at foreign countries have applied and are unable to get the approval from the BIS, both in the case of VSF and PSF," said K Venkatachalam, chief advisor, Tamil Nadu Spinning Mills Association (Tasma).  The strategy of not giving clearance for foreign manufacturers may reduce the competitive nature of the market too.

"Yarn industry will be forced to buy from the local manufacturers only and they will supply it. Only thing is competitiveness will go. These products are imported because of the better quality and fair price compared to the local people. This is a strategy to support local manufacturers," he added.  

Early this year, the Association of Man-made Fibre Industry of India (AMFII) had approached the government asking it to accept the recommendations of the Directorate General of Trade Remedies (DGTR) on levy of anti-dumping duty (ADD) on imports of Viscose Staple Fibre from Indonesia. According to them, the import of VSF had increased fivefold since the removal of ADD in August 2021.

In its third quarter earnings call, Grasim had also raised concerns on the Indonesian imports. "The difference is like they will always try to price imports lower than our domestic price at any time. So, they know our domestic price and accordingly they offer their prices because they have to make it attractive. So, that is a normal thinking and more or less it follows the international prices, but they have been trying to get market share in India so they are giving aggressive prices, they have been giving aggressive prices. So, we have to deal with that and adjust our pricing accordingly. We cannot also lose market share beyond a point to any imports," said H K Agarwal, managing director of Grasim Industries.

The government has decided to issue a quality control order for all the textiles and clothing products to protect consumer and indigenous textiles and clothing product manufacturers’ interests and to ensure that proper import quality is maintained.

While on VSF and PSF products BIS certification became mandatory, the Department of Chemicals and Petrochemicals has allowed manufacturers of polyester filament, polyester POY, industrial yarn, and grey and white yarn time till July 3 to follow the guidelines.