Polyester or synthetic yarn could become cheaper in India. The anti-dumping duty on Purified Terephthalic Acid (PTA) has been abolished in this Budget. This will make imports of the petrochemical from Iran, China, Indonesia, Malaysia, Korea, Taiwan and Thailand cheaper. Removal of the anti-dumping duty will put pressure on realisations of domestic PTA manufacturers and will lead to accelerated imports at a time when the market is facing a glut emanating from large capacity additions in China recently. The duty removal will now allow Indian synthetic yarn spinners to access cheaper, good quality raw material from outside India, making their cost structure more efficient. The move will open up the manmade fiber value chain, benefiting technical textiles, home furnishing, sportswear, saris and dress materials, among others.

Once this key textile raw material becomes cheaper, domestic yarn manufacturers are expected to pass on the benefit to consumers. China has added huge capacities in recent quarters and there is a possibility of cheaper imports from that country after removal of this duty.

PTA is a key raw material in synthetic yarn production on which anti-dumping duty was imposed to protect domestic manufacturers. These produce nearly 3.5 million tons PTA for the domestic market. The rest is exported.