NITMA urges government to reject the move, citing severe threats to MSMEs and textile growth
The Northern India Textile Mills’ Association (NITMA), along with major trade bodies and associations such as PTAIA, CITI, SGCCI, and SIMA, has strongly opposed the Directorate General of Trade Remedies’ (DGTR) recommendation to impose an Anti-Dumping Duty (ADD) on Mono Ethylene Glycol (MEG).
The delegation recently met with officials from the Ministry of Textiles and the Department of Chemicals & Petrochemicals to voice concerns that such a move would severely harm India’s man-made fibre (MMF) value chain. NITMA cautioned that the duty would cause catastrophic consequences for the predominantly MSME-based downstream sector, endangering millions of jobs and stalling key investments.
Rising Costs Could Cripple MSMEs
The core concern, according to NITMA, lies in the steep rise in input costs the proposed ADD would trigger. MEG is an essential raw material for producing polyester staple fibre (PSF), yarn, filaments, fabrics, and garments.
“The proposed Anti-Dumping Duty is expected to increase MEG prices by nearly 20%. Such an escalation will force several MMF units across India to shut down. Many factory owners are already at a breaking point and are unable to bear this additional burden,” the association warned.
The sector is already battling uncompetitive pricing due to the Bureau of Indian Standards (BIS) quality control order:
- Before BIS implementation: Domestic PSF prices were already 15–20% higher than those paid by global competitors such as China, owing to freight and duty costs.
- After BIS implementation: With limited imports from non-BIS countries, domestic fibre producers charge a premium of ₹6–₹7 per kg.
- Impact of MEG ADD: The proposed duty could push this premium to ₹10–₹11 per kg, further squeezing MSME margins and threatening survival.
Severe Implications for India’s Textile Ambitions
The imposition of ADD on MEG could have far-reaching consequences:
- Massive job losses across MSME clusters in the MMF value chain.
- Loss of competitiveness in export markets, leading to higher dependence on imported fabrics and garments.
- Delayed investments worth over ₹20,000 crore, including projects under the Production Linked Incentive (PLI) scheme.
- Rising consumer costs, offsetting the benefits of recent GST reductions.
- Market imbalance, as only one major MEG producer stands to gain at the cost of thousands of smaller textile units.
Industry Data Calls for Duty-Free Raw Materials
NITMA highlighted that the domestic supply-demand gap makes the ADD unjustifiable:
- Current Supply vs Demand: Domestic MEG production (approx. 19.4 LMTPA) falls short of the 31.0 LMTPA required, with no new production capacity in development.
- Precedent: The Anti-Dumping Duty on PTA was removed in 2020 to maintain competitive pricing; the same logic applies to MEG.
- Pricing Trends: Domestic MEG producers follow international benchmarks, raising doubts about the validity of “dumping” claims.
- Policy Contradiction: While the government recently removed the 11% customs duty on raw cotton to lower costs, imposing ADD on MEG—already subject to 5% customs duty—contradicts the drive for globally competitive textile inputs.
“The polyester segment, which makes up around 50% of India’s total textile consumption, is the backbone of our industry,” NITMA added. “An ADD on MEG will increase yarn and filament prices by ₹3.50–₹4.00 per kg, making it nearly impossible to achieve the USD 350 billion textile trade target by 2030.”
Refuting Pro-Duty Arguments
The association also addressed several misleading narratives circulating in favour of the duty:
- Claim 1: The cost rise is manageable.
In reality, an additional ₹9–₹13 per kg in MEG prices would destroy MSME profitability, with even a ₹4/kg increase making small weavers unviable. - Claim 2: Domestic capacity meets demand.
Domestic production consistently lags behind consumption, and logistical challenges restrict the ability to replace imports quickly. - Claim 3: MSME impact is minor.
The burden is estimated in thousands of crores, with many units likely to close and PLI-linked expansions being postponed. - Claim 4: Dumping is proven.
Market data shows tight supply and international price alignment, invalidating dumping claims. The 2020 removal of ADD on PTA strengthened competitiveness, and MEG deserves the same treatment.
Industry’s Unified Call to Action
NITMA and allied industry bodies jointly urged the government to:
- Reject the proposed Anti-Dumping Duty on MEG.
- Remove the BIS quality control order on MEG.
- Keep essential raw materials free from levies to safeguard MSMEs, employment, and India’s textile growth targets.