PFY Dilemma

Polyester filament yarn (PFY) has always posed various problems in India due to different lobbies from the textile industry acting in their own interests. A national fibre policy could have led the industry to a solution but so far, it has been only a far cry. If one considers last year, the total production of PFY in the country was 12,866,23 tonnes, which showed – 06.67 per cent growth. But exports soared to 3,934,97 tonnes, showing a growth of 24.30 per cent. The synthetic fabric industry is up in arms, accusing vested interests of denying the local weavers adequate supply of PFY, resulting in lower production of fabrics. Due to the artificial shortage created by the spinners the prices of yarn have been constantly jacked up. Moreover, the spinners are unable to import PFY due to a heavy anti-dumping duty. The spinners in India, who are exporting PFY at cheaper rates, have been able to compete in the international market with China. Making a plea for removing the anti-dumping duties, the synthetic fabric manufacturers point out how a piquant situation has been created in the raw material scene too. The average prices of PTA, MEG and PP chips have ruled costlier in China than in India, but the conversion cost is much cheaper in China compared to India. For example, the conversion cost of PP to POY chips is around Rs 19 per kg, while in China, it is around Rs 10.50. Is this vast difference due to low VAT and other duties in China or that the manufacturing technology in China far superior than in India? So, there is a clear-cut argument to bring down excise duty on PFY to a level even lower than prevailing in China so that instead of increasing export of yarns and fibres, India can export more man-made fabrics. This will also go a long way in reversing the current trend of imports of man-made fibres, yarns and fabrics from China.