Economy

Budget expectations: Domestic industry seeks increase in import duty of man-made yarn

Our Bureau New Delhi | Updated on January 23, 2021

Cheap imports, especially from Vietnam, Indonesia, have captured 25% of local market, producers complain

Domestic manufacturers of man-made yarn have sought an increase in import duty on the product to 10 per cent from the existing 5 per cent in the forthcoming Union Budget to put a check on its rising imports.

“Average monthly imports of man-made yarns in 2020 were 5,212 tonnes out of the total domestic monthly consumption of 22,000 tonnes. This means that imports enjoy 25 per cent of the total market share. Moreover, this trend is increasing with great speed,” pointed out the Northern India Textiles Mills Association (NITMA) in an official release circulated on Saturday.

Monthly average imports of virgin polyester spun yarn have increased by 972 per cent between 2015 and 2020, the association further pointed out, adding that imports from Vietnam alone had increased by a steep 10,512 per cent, that is, 107 times.

“Import numbers have been rising substantially year after year due to unreasonably low prices offered by Indonesian & Vietnamese spinners on account of huge idle capacities created owing to their government’s incentives,” the release stated.

The association proposed that the Ministries of Finance and Textiles should consider increasing the customs duty on man-made yarn to 10 per cent from its present level of 5 per cent in the forthcoming Budget for the growth and expansion of domestic MMF Industry and to prevent mass level loss of employment.

Low-priced imports

The low-priced imports of man-made yarn into India have been causing considerable injury to domestic manufacturers for the last 5 years or so, said NITMA President Sanjay Garg.

“The industry has deep concerns over the rise in import quantities being dumped into India, which can potentially cause permanent damage to the domestic MMF sector with the cascading effect, from closure of units to NPAs, and eventually resulting in huge employment loss,” he added.

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Published on January 23, 2021
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