VSF textile sector against lifting anti-dumping duty

29 Apr '16

3 min read

India's viscose staple fibre (VSF)-based textile industry which has grown remarkably in the last five years, has warned that “tampering the existing anti-dumping duty structure will affect its growth" in the light of increased dumping by China and Indonesia.

"Before anti-dumping duty was imposed, Chinese and Indonesians had nearly killed our market. Now both the countries are again trying to flood the market with heavy discounts," Ramesh Natarajan, Director of Indian Man-Made Yarn Manufacturers Association, told PTI.

The anti-dumping duty, imposed in 2010, is due for review and a section of the textile industry is calling for ending duty protection, citing rising input cost.

Among those pushing for scrapping the anti-dumping duty is the Indian Spinners Association (ISA). It has said continuation of the duty on the fibre will have a "deleterious effect" on the textile sector, which is already reeling under high cost of production and sagging export demand.

Before the government imposed the anti-dumping duty, Chinese and Indonesian companies were selling their products at Rs 185-190 a kg while the domestic prices were much higher, Natarajan said. But the quality of domestic VSF is unmatched, he added.

He warned that if the anti-dumping duty is rolled back, it will kill the domestic industry.

Natarajan claimed that the industry has already lost over two lakh direct jobs, with one lakh in the Coimbatore-Erode belt of Tamil Nadu alone. He warned of more job losses if the government succumbs to international and domestic pressure.

Natarajan said the biggest VSF-based textile hub is the Coimbatore-Erode belt which consumes over 20,000 tonnes of the textile a month, while the intake in the rest of the country is only 5,000 tonnes.

"The government must ensure that there are adequate safeguards in place for all products of the VSF value chain so that this industry attracts more investments and drives local manufacturing, which is the key focus of the present regime," P S Sundaram, Managing Director of Erode-based Victory Spinning, said.

Over the past five years, the domestic VSF industry grew at a CAGR of 11 per cent while exports clocked 14 per cent CAGR, the report said.

Exports jumped from 249 tonnes per day (tpd) in 2011-12 to 424 tpd in 2015-16, and domestic sales grew from 590 tpd to 853 tpd.

This growth has been driven by the largest domestic VSF producer Grasim Industries, initiatives like creating robust consumer demand and collaboration with SMEs, among others.

Development of the VSF supply chain has also attracted major global brands.

According to the report, top international brands like American Eagle, Kohls, Bershka and GAP, among others, have increased their intake from India by around 20 per cent, the report said. (SH)

Fibre2Fashion News Desk – India

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