The Union finance ministry may not impose anti-dumping duty (ADD) on viscose staple fiber (VSF) from Indonesia, as it could lead to shortage of a key raw material for India's textile industry.
The commerce ministry's Directorate General of Trade Remedies (DGTR) had in December recommended a duty of $0.512/kg on these imports, as part of a government initiative to enhance the quality of textiles. However, about a dozen members of Parliament, including those from the ruling party, recently wrote to Finance Minister Nirmala Sitharaman to raise the import price of viscose fiber by up to ₹40 per kg.
“The DGTR had recommended anti-dumping duty only on VSF imports from Indonesia. We import from two-three countries including Indonesia, Austria, and China. Anti-dumping duty was recommended only in the case of Indonesia as the investigation revealed injury to the domestic industry."
Dropping the move to impose duty would provide relief to domestic garment manufacturers, who were facing the prospect of business disruption, reduced competition and economic losses. “The Finance Ministry takes into account the recommendation of the DGTR and also the public interest. The finance ministry has not announced the fee, and the period in which a decision was expected to come is now over. Therefore, there is no possibility of anti-dumping duty on VSF. Duty was limited to Indonesia as there was a huge surge."
The MPs wrote to Sitharaman that viscose-blended cotton is the future and forms an important raw material for the spinning and weaving industry, apparel, accessories and technical textile production. He also pointed to problems with VSF availability. “In this financial year, the domestic VSF demand was 700,000 tonnes, and the availability was only 540,000 tonnes. This move (proposition of ADD on VSF) may increase the import price of viscose fiber by up to Rs 40 per kg.
The government is focusing on quality, but that does not mean it is not considering maintaining availability. He said, 'I am not refusing imports, but substandard imports should not be encouraged. But at the same time, assured availability of raw materials also needs to be guaranteed."
The imposition of a fee on VSF was recommended amid quality improvement efforts and is no longer expected. “The industry understands that there is a need for quality, but the government must realize that our buyers cannot be affected. There is stiff competition from Bangladesh and Vietnam, and if buyers get a better deal, they will not buy from India. This cannot be achieved by force. The government should take an interim step where there can be a voluntary approach for a year," he said.
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