The Ministry of Chemicals and Fertilizers' recent Quality Control Order (QCO) on polyester staple fibers and various yarns, effective from July and October 2023 respectively, mandated procurement only from Bureau of Indian Standards (BIS) license holders. However, pending approvals for foreign manufacturers disrupted the supply chain, severely impacting manufacturer-exporters, especially those reliant on overseas markets for specialty fibers. This has hindered the man-made fiber (MMF) value chain's export performance. Similarly, the QCO for Viscose Staple Fibre (VSF) affected the VSF value chain, prompting industry pleas for exemption, particularly for exports.
In response to industry pressure, the Southern India Mills’ Association (SIMA) hailed the government's decision to exempt VSF imports under the Advance Authorization Scheme, effective March 2024. Additionally, the recent exemption for polyester staple fibers, filaments, and spun yarns under the same scheme, announced in June 2024, received appreciation. SIMA Chairman SK Sundararaman commended the reduced export obligation period from 18 to six months, easing constraints on MMF imports.
Sundararaman emphasized the significance of these policy changes in revitalizing MMF textile exports, crucial for achieving the textile industry's ambitious growth targets. He highlighted the industry's struggles, including higher raw material prices, which hindered India's competitiveness compared to countries like China and Bangladesh. Sundararaman urged the government to tackle structural issues, proposing a unified 5 per cent GST rate for the entire MMF value chain, alongside measures to ensure uninterrupted raw material supply.
While lauding the removal of anti-dumping duties and import duty reduction on MMF, Sundararaman emphasized the need for comprehensive reforms to propel India's textile industry forward. Addressing these concerns, including duty inversion and GST rates, he asserted, would not only bolster exports but also enhance access to affordable clothing for millions of Indians, while invigorating the industry and fostering economic growth.
