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SIMA welcomes removal of ADD on Viscose Staple Fibre

Aug 18, 2021
SIMA welcomes removal of ADD on Viscose Staple Fibre

Coimbatore, Tamil Nadu

The Southern India Mills’ Association (SIMA) has welcomed the government bold decision of removing the anti-dumping duty (ADD) on viscose staple fibre. 

In a Press Release, Ashwin Chandran, Chairman, The Southern India Mills’ Association (SIMA) has appreciated and thanked Shri Narendra Modi, Nirmala Sitharaman, Shri Piyush Goyal and also the former Union Minister of Textiles, Smriti Zubin Irani for the step.

Ashwin Chandran has stated that unlike other manmade fibres, the viscose staple fibre produced by a single indigenous manufacturer was very expensive to the tune of Rs.20 per kg, though recently the domestic manufacturer has reduced the price to match with the international price to a certain extent.  He has said that the deemed export price concept extended by the indigenous manufacturer greatly affected the power-loom and downstream sectors, as the industry is predominantly MSME and fragmented.  The anti-dumping duty on VSF ranged between US $ 0.103 per kg and US $ 0.512 per kg.

The viscose staple fibre attracted anti-dumping duty during the last eleven years which curtailed the growth of this high value-added textile segment. The Directorate General of Trade Remedies (DGTR) vide its Sunset Review final finding Notification No. Case No. SSR AD – 03/2021 dated 31st July 2021 recommended to remove the anti-dumping duty on VSF. Consequently, the Department of Revenue, Ministry of Finance, Government of India has issued the notification No. 44/2021-Customs (ADD) dated 12th August 2021 revoking the anti-dumping duty on VSF.

 

Indian textiles and clothing industry, that provides jobs to over 105 million people, has been facing several challenges especially on raw material front and could not achieve the envisaged potential growth rate both in the international and domestic markets.  The industry has been pleading for a level playing field and ensure global competitiveness to achieve the vision of increasing the textile business size from the current level of US $ 164 billion to US $ 350 billion by 2025.

Historically, cotton has been the engine of growth for the Indian textile industry owing to availability of surplus homegrown cotton at an internationally competitive price.  In most of the competing nations, MMF and its blended textile product exports account 60 to 80% while in India, the same is below 25% mainly due to the expensive raw material. 

Consequent to the meeting of the industry delegation with the Prime Minister during December 2019 and subsequent representations, the NDA Government has been bold enough to remove the anti-dumping duty on PTA, reject the proposed anti-dumping duties on PSF, MEG, etc., that has made the polyester staple fibre and yarn available at international price.

SIMA Chairman has stated that the industry started facing shortage of viscose fibres as the supply was restricted to only around 200 spinning mills while the polyester fibre was made available freely across the segments.  He has stated that the viscose staple fibre was not made available for the MSME segment that greatly affected the power-loom and the MSME garment sectors.  He has stated that the removal of anti-dumping duty on VSF would greatly benefit the MSME segments.

The SIMA Chief has stated that the Government has recently announced the Production Linked Incentive Scheme earmarking Rs.10,683 crores to attract large scale investments in the MMF value chain. As majority of these products comprise of viscose and its blended textiles, the anti-dumping duty removal would facilitate trading in the MMF products.

He added that the VSF spinning segment has been facing severe challenge due to duty free import of VSF spun yarn from the ASEAN countries though it benefited the powerloom and the downstream sectors.  Over two lakh powerlooms in Tamil Nadu have migrated to VSF fabric production in the recent years and the duty removal would encourage the powerlooms in Tamilnadu and other parts of the country to achieve an exponential growth rate.

Sources: VSF Press Release

Image Sources: Google Images

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