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Increase in man-made fibre imports hurts domestic textile sector

As per CITI, the continuous increase of man-made fibre (MMF) imports is deeply hurting the domestic textile industry, especially after the implementation of GST. MMF has made considerable investment to enhance its capacity building to meet the desired target of reaching $350 billion market size by 2025. However, post GST, there was a rise in imports of all the MMF products. Imports of MMF yarn and apparel also rose by 83 and 84 per cent respectively.

The main reason for this was the removal of CVD after GST, which made imports 12 per cent cheaper, overnight. To control imports, the government subsequently increased import duties on fabrics and garments. Thus, there has been a relative control on the imports of fabrics, but, this measure could not control garments due to FTAs.

The highest share in Indian MMF textiles was of polyester bases products. Since 2014-15, import of polyester yarn has risen by a CAGR of around 13 per cent to hit $ 95 million. Imports from Indonesia increased exponentially at a CAGR of 59 per cent for 2018-19 and in this period, Indonesia has also been the biggest supplier of polyester yarn to India.