Imports of cheaper yarn from countries such as China and Indonesia are hurting India’s textile industry. A large number of small and medium yarn producing units are on the brink of closure, said experts.
Viscose staple fibre (VSF) yarn imports have surged about 200% year on year in the first five months of this financial year, touching a record 8,029 tonnes in August for an average monthly demand of 50,000 tonnes .
Imports of cheaper yarn from countries such
as China and Indonesia are hurting India’s textile industry. A
large number of small and medium yarn producing units are on the brink of
closure, said experts.
Owing to the US-China trade war as well as free trade agreements with
ASEAN countries that allow duty-free imports into the country, viscose staple
fibre (VSF) yarn imports have surged about 200% year on year in the first five
months of this financial year, touching a record 8,029 tonnes in August for an
average monthly demand of 50,000 tonnes.
At the same time, demand for the yarn has remained
steady, growing at a compounded annual growth rate of 14% in the past five
years. An industry insider said that excess capacity in China is more than the
Indian demand for the fibre and with so much oversupply through cheaper
imports, domestic manufacturers are forced to match the low price that is
taxing them heavily.
There is currently a 5% duty on imports of VSF yarn and the industry is
pleading to have government increase this to 10-15%. “These are not easy days.
There is at least one month of unsold inventory across spinners, large and
small,” said Ramesh Natarajan, secretary of Indian Manmade Yarn Manufacturers
Association.
