SIMA appeals FM to sustain the survival of VSF value chain

SIMA appeals Finance Minister to reject the ADD recommended by DGTR on Viscose Staple Fibre to sustain the survival of VSF value chain

The Hon’ble Prime Minister has been taking various path breaking policy initiatives to address the raw material structural issues, especially the manmade fibres, the future growth engine of the Indian textile industry by removing the anti-dumping duties (ADD) levied on various raw materials including PTA and MEG, polyester staple fibres, acrylic fibre and viscose staple fibre. However, based on the appeal made by the Associations of MMF industry, Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi had remanded the matter to DGTR to re-examine and consequently, the Directorate General of Trade Remedies (DGTR) has now recommended to levy 0.512 USD per kg anti-dumping duty on the Viscose Staple Fibre imported from Indonesia. 

In a Press Release issued here today, Mr. Ravi Sam, Chairman, The Southern India Mills’ Association (SIMA), has appealed to the Hon’ble Union Finance Minister to reject the unrealistic recommendation made by DGTR and ensure the survival of MSME spinning mills, decentralized powerloom and handloom sector and also the garment sector. He has stated that the ADD levy gives a protection to the tune of 26% to the indigenous VSF manufacturer.  He has pointed out that majority of the imported raw material, machinery, etc., attract only 5% to 7.5% basic customs duty while such an abnormal protection is totally unwarranted and on the contrary, this would greatly affect the entire VSF value chain. He said that over two lakh powerlooms in the State of Tamil Nadu had diverted to VSF fabric manufacturing and enabling value added exports. He has said that the powerloom sector had to import million kgs. of VSF spun yarn from Indonesia when the VSF attracted anti-dumping duty and after the removal of ADD, the import had reduced kgs. per month. He has pointed out that ADD levy would again make the fabric manufacturers to switch over to imports that would have serious impact on the MSME spinning mills. Mr. Ravi Sam has said that majority of the MSME spinning mills could blend Viscose Staple Fibre with the cotton to the tune of 10 to 15% and sustain their competitiveness which would be eroded with the recommended ADD.

SIMA Chairman has stated that the indigenous VSF fibre manufacturer is not in a position to meet the growing demands of the VSF value chain, rationing their supply and affecting the potential growth of the industry. He has added that the indigenous fibre manufacturer has been supplying the fibre only to less than 300 spinning mills, while the country has around 4000 spinning mills. He has pointed out that any spinning mill in the country could buy any quantity of polyester staple fibre at an internationally competitive rate. After the removal of ADD on VSF, any SSI spinning unit or open end spinning unit could also buy VSF staple fibre at international price and cater to the needs of handloom and power loom sector, says Mr. Ravi Sam. With the imposition of ADD, this raw material availability would again become scarce resulting in industrial unrest. Against this background, SIMA chairman has appealed to the Hon’ble Union Minister of Finance to reject the abnormal ADD rate recommended by the DGTR. He has pointed out that the DGTR could have restricted the ADD to the level of 0.1 to 0.15 USD that would have enabled win-win strategy for the entire value chain.

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