India's polyester imports have jumped substantially over the past two months after country-specific dumping duties — on top of a five per cent basic customs duty — were imposed on a key raw material in July, hurting domestic producers’ competitiveness. Anti-dumping duties were imposed on imports of purified terephtalic acid (PTA) from China, Korea, the European Union and Thailand.

Purified terephtalic acid is used in making polyester staple fibre, polyester filament yarn and film. Subsequently, imports of polyester staple fiber more than tripled in July-August this year. Similarly, purchases of polyester filament yarn from overseas climbed 130 per cent in the last two months from a year earlier. Companies using PTA have sought the removal of anti-dumping duties, arguing that no industry can work on the inverted duty structure whereby imports of raw materials are taxed higher than those of finished products.

If that’s not possible, they say, the government should scrap the five per cent basic customs duty on the yarn and raise the import duty on the finished goods so that domestic industry isn’t harmed and India’s export competitiveness in synthetic or blended textiles and garments is not undermined. India produced 3.47 million tons of PTA in 2012-2013 compared with the demand of 4.12 million tons.