Necessity of QCO in PTA and MEG for quality products in value chain
In order to facilitate smooth implementation of these orders, provisions for additional time periods to get BIS licenses and upgrade their testing facilities are being contemplated.
The government introduced Quality Control Orders (QCO) in polyester products like Terephthalic Acid (PTA), Ethylene Glycol (MEG) and polyester fibre in a move aimed at containing import of the sub-standard goods and boost the domestic industry with the aim of promoting manufacturing of high-quality products in the country.
In order to facilitate smooth implementation of these orders, provisions for additional time periods to get BIS licenses and upgrade their testing facilities are being contemplated.
These orders are issued by the department in consonance with the WTO (World Trade Organisation) Agreement on Technical Barriers to Trade for industries falling under its domain. Standards set benchmarks for quality and ensure availability of high-quality products to all consumers.
Domestic Licensed Capacity along with the foreign players who have got the license for PTA and MEG is much more than the domestic demand & hence there is no possibility of short supply. Total capacity of the overseas PTA players who have got the BIS certificate is more than 11 Mn Tons so shortfall in demand of around 0.4 Mn Tons can easily be met by importing PTA from these suppliers.
Similarly, capacity of overseas MEG producers those who have got license is more than 2.7 Mn Tons which is sufficient to meet the shortfall in demand of 0.3 million tonne.
Domestic Industry is suffering badly due to imports from China and is not able to utilise its installed capacity. There is a news reported by Chinese agency only that there had been significant increase in PTA export volume by Chinese players in May to India with an average monthly export volume of about around 77 Kilo Tons in 2022 reached 162 Kilo Tons in May this year.
Further there are expansions planned by domestic industry which will get impacted if imports of sub-standard products from China are not restricted.
These quality control orders would help in promoting sale of quality products and will increase the brand equity of Indian Textile Industry in the global context as quality supplier of textile and products. Product Quality, Sustainability, Circularity, Environmental aspects, Consumer protection and Aatma-Nirbharta through Indian standards and QCO is a national policy being pursued vigorously to protect end consumers and will help in building a healthy and quality value chain.
Annexures
Annexure 2: Demand Supply Situation
| HS Code | Product | Cap (KT) 2022-23 | Demand (KT) 2022-23 | Imports to India 2022-23 | Capacity in 2028 (KT) | Incremental Capacity Addition by 2028 (KT) | |
| Value ($Mn) | Vol (KT) | ||||||
| 29053100 | MEG – Ethylene Glycol | 2697 | 3022 | 830 | 1501 | 2839 | 142 |
| 29173600 | PTA – Terephthalic Acid | 6440 | 6837 | 1462 | 1596 | 11610 | 5170 |
Source: Industry & DGCIS
Country Wise PTA Import
| Country | 2022-2023 (KT) |
| CHINA P RP | 925 |
| TAIWAN | 334 |
| THAILAND | 316 |
| OTHERS | 22 |
| Total Imports | 1596 |
Country Wise MEG Import
| Country | 2022-2023 (KT) |
| KUWAIT | 777 |
| SAUDI ARAB | 406 |
| SINGAPORE | 122 |
| OMAN | 55 |
| U ARAB EMTS | 40 |
| U S A | 29 |
| IRAQ | 24 |
| OTHERS | 50 |
| Total | 1501 |
Annexure 3: Licenses Received by Overseas Players
List of Overseas PTA players who have received BIS License
| Players | Country | Capacity (KT) |
| Indorama Ventures Limited (IVL), Map Ta Phut | Thailand | 771 |
| TPT Petrochemicals Public Co. Ltd., Map Ta Phut | Thailand | 602 |
| PTT Global Chemical Public Company Limited, Map Ta Phut | Thailand | 1,500 |
| PT Indorama Petrochemicals, Merak | Indonesia | 500 |
| Ineos, Merak | Indonesia | 580 |
| Hanwha General Chemical, Ulsan | S Korea | 2,035 |
| GC-M PTA COMPANY LIMITED | Thailand | 1440 |
| TAEKWANG INDUSTRIAL CO., LTD | S Korea | 1000 |
| Oriental Petrochemical (Taiwan) Co., Ltd. | Taiwan | 1990 |
| CHINA AMERICAN PETROCHEMICAL CO., LTD | Taiwan | 760 |
| Total | 11,178 |
Total capacity of the overseas players who have got the BIS certificate is more than 11,000 KT so shortfall in demand of around 400 KT can easily be met by importing PTA from these suppliers.
List of Overseas MEG players who have received BIS License
| Name | Country | Capacity (KT) |
| Shell Chemicals | Singapore | 1341 |
| Equate Petrochemical Company (Equate Group) | Kuwait | 600 |
| The Kuwait Olefins Company (Equate Group) | Kuwait | 821 |
| Total | 2762 |
Capacities of Global MEG producers those who have got license is more than 2700 KT which is sufficient to meet the shortfall in demand of 325 KT.
