Shri Sanjay Garg, President NITMA is extremely appreciative of the Hon’ble Minister for Commerce & Industry, Shri Piyush Goyal Ji & DGTR for their recommendation to impose ADD on PSY, originating in or exported from China PR, Indonesia and Vietnam and above all, to the dynamic vision & leadership of the Hon’ble PM Shri Narendra Modi Ji.
He then touched upon slew of measures & decisions taken by Govt. to actuate the expansion of Indian Industry, Textile & clothing industry in particular, mentioning the following:
- Recently announced RoDTEP scheme for exporters covering entire textile value
- Encouraging MMF segment via PLI scheme
- Removal of ADD on Viscose Staple Fibre (VSF)
- Revoking ADD on PTA which is the primary raw material for Polyester Staple Fibre (PSF)
- Setting up of Seven Mega Textile parks under MITRA scheme
- Extension of RoSCTL scheme, for Garments & Made-ups, upto 03.2024
Shri Garg further added that all of the above steps will provide India’s textile industry an opportunity to attain unparalleled success.
Moving back to the ADD on PSY, Shri Siddharth Khanna , MD of Arisudana Industries Ltd. ,Ludhiana & Head of NITMA’s MMF chapter, shared briefly that in pursuit of the same, NITMA members made several representations to all the pertinent authorities coupled with offline & online meetings. Also, members of NITMA & many other producers of PSY throughout the country have had to carry out an immensely meticulous exercise, amidst the pandemic, of collecting data from one of the most fragmented domestic industry consisting of more than 500 entities, so that the facts can be presented before the designated authority & eventually DGTRs’ final findings , vide its notification dt. 19.08.2021, is a testimony to what NITMA members have been stressing upon for so long.
He then shared the primary factors why the situation of the PSY producers is currently so grave:
o The anomaly in the FTA agreement with Indonesia & Vietnam
The HS code under which PSY falls (HS-55092100) is included in the ASEAN FTA & hence cleared @ ZERO duty with the ASEAN certificate. While the Yarn is cleared zero duty, its immediate raw material Polyester Staple Fibre HS code 55032000 is not included in the FTA & hence cleared @ full duty rate of 5.5% since it is not included in the list. This has denied a level playing field for the Indian Spinning Mills as compared to their counterparts in Indonesia & Vietnam & makes it impossible for the domestic industry to compete with the dumped & zero duty imports.
o Removal of safeguard against imports with the introduction of GST
Surge in import has been happening post- GST, as the excise duty on imported PSY negated the advantage that they enjoyed due to the FTA. This was because domestic yarn was exempt from excise. Post-GST, with the removal of excise and SAD, polyester yarn is being cleared @ zero duty.
Following is the country-wise data on import of Virgin Polyester spun yarn from 2015-2020, which explains that there is an urgent need for notifying imposition of ADD on Polyester Spun Yarn:
Import data (tons) for Virgin PSY from 2015-2020 from 4 countries in question:
Source: Volza, as only HS code wise data is available on DGCIS website & PSY is a subset of the HS 55092100
*2020/21 is for data from 1st August 2020 to 31st July, 2021 & omits the 7 month data from January to July During which all economic activity came to a standstill due to Covid Pandemic
Following points can be drawn from the above data :
Ø Imports of Virgin Polyester Spun Yarn have increased by 943% from 2015 to 2020/21. Imports from Vietnam alone have increased by mammoth 8,835%, that is, 88 times.
- Imports for 2020/21 are 60,810 tons out of the total domestic consumption of 264,000 tons which means that imports enjoy 23% of the total market share & this trend has been increasing with great
- Import numbers have been rising substantially year after year due to dumping by Indonesian, Vietnamese & Chinese spinners as well as due to the clearance at zero duty under the ASEAN
Shri Aman Gupta , Vice President of NITMA stated painstakingly that as a result of the above, the Synthetic segment of India’s textile sector has been devastated operationally as a consequence of which most of the units have become NPAs & the rest are on the verge of being declared as NPAs. He also added that out of the total producers of PSY in India, only a handful of them are doing well & the majority of them have been in dire straits due to underutilization of their units owing to lack of demand.
While summarising the entire scenario, Shri Sanjay Garg again expressed his sincerest gratitude towards the authority for testifying the facts & figures submitted by the domestic industry & at the same time he humbly appealed to Smt. Nirmala Sitharaman Ji, the Hon’ble Minister for Finance, to notify the same at the earliest, as any amount of delay now may well push the domestic synthetic industry beyond revival jeopardising massive employment associated with it.
He concluded his statement on a cheerful note by asserting a sturdy conviction that the present government has got everything it takes to nurture, strengthen & restore the domestic industry in order to accomplish the mission “Aatmanirbhar Bharat”.
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