India's Directorate General of Trade Remedies (DGTR) has recommended an anti-dumping duty (ADD) of $102–173 per ton on Mono Ethylene Glycol (MEG) imported from Gulf nations and Singapore. However, the downstream textile industry has cautioned the government against accepting the recommendation, warning, it would hinder the growth of the man-made fiber (MMF) textile and apparel sectors. This comes right after a GST cut on the MMF value chain had boosted prospects for industry expansion.
The DGTR concluded, MEG imports from Kuwait, Saudi Arabia, and Singapore were being ‘dumped’ in the Indian market, causing harm to local producers. These findings follow a year-long investigation initiated at the request of the Chemicals and Petrochemicals Manufacturers Association of India (CPMA), primarily backed by Reliance Industries (RIL).
The investigation began last September after allegations that exporters from Kuwait, Saudi Arabia, and Singapore were selling MEG in India at unfairly low prices. MEG is a key raw material for polyester yarns, PET resins, and antifreeze, making it vital for India’s textile and packaging industries. RIL, which accounts for over 70–80 per cent of domestic production, argued that low-priced imports had depressed local prices and hurt its profitability.
The DGTR determined, exporters from these countries sold MEG at prices significantly below their normal value, with dumping margins ranging from 20–50 per cent. It found, despite increased domestic capacity, unfairly priced imports had undercut prices and eroded profitability for Indian producers.
Supported by the CPMA, RIL claimed, government intervention in Gulf markets distorted raw material costs, giving exporters an unfair advantage. Exporters, however, maintained that their prices reflected true market conditions and attributed the decline to global price trends rather than dumping.
Following the DGTR's recommendations, the proposed anti-dumping duty on MEG would range from $102–173 per ton, or about Rs 9–15 per kg.
RK Vij, Secretary General, Polyester Textile Apparel Industry Association (PTAIA), states, Indian MEG is already costlier by Rs 4–5 per kg. The proposed duty will further increase the price by another Rs 4–5 per kg. The government should not accept the recommendations, as it will hamper the growth of the entire textile value chain.
The rationalized GST has brightened prospects for the MMF textile industry. India can expect rapid growth in the MMF segment after the GST cut. But the proposed duty will nullify these benefits, he adds. If the government accepts the recommendations, yarn and fabric imports will rise from China and other countries, and the Indian MMF textile and garment industry will struggle to compete globally.
Vij notes, industry representatives plan to meet with Finance Minister Nirmala Sitharaman to urge the government not to impose the recommended anti-dumping duties. MEG manufacturers have attempted to push for such duties before, but the government had rejected those measures.
