Indian industry urges govt to drop ADD on MEG to avoid supply shock

R K Vij, industry veteran and secretary general of the Polyester Textile Apparel Industry Association (PTAIA), told Fibre2Fashion, “DGTR has issued a Disclosure Statement on the investigation into injury caused to the domestic industry due to excessive imports of MEG in the second week of this month. It will submit its final findings within a week, after which the Department of Revenue under the Ministry of Finance must take a final call. The government should rethink the imposition of anti-dumping duty.”

Vij has also submitted a detailed letter to Finance Minister Nirmala Sitharaman, highlighting the criticality of the issue. “MEG is an essential ingredient for the production of polyester fibres, polyester chips, fibre, and yarn, which are further processed to produce value-added products such as filaments, fabrics, and garments. This entire value chain constitutes the man-made fibre (MMF) industry, which is the growth engine of India’s textile sector,” he said.

In India, MEG is manufactured by only three producers—Reliance Industries Limited (RIL), Indian Oil Corporation Limited (IOCL), and India Glycols (IG). The largest producer, RIL, consumes nearly 60 per cent of its own output, leading to an acute shortage in the domestic market. The current demand–supply gap is estimated at approximately 12 lakh tons per year, even with all three plants operating at full capacity. The installed capacity of Indian plants is 26.04 lakh tons per year. During 2025–26, MEG production is expected to be 19.41 lakh tons against consumption of 31 lakh tons, resulting in a shortage of 11.59 lakh tons, Vij informed the minister.

The association warned that imposing ADD on MEG could jeopardise new investments of around ₹20,000 crore announced by the downstream consumer industry, along with potential job creation for three lakh people. “It is requested that the user-MMF industry be supported by not imposing any anti-dumping duty on MEG,” the letter stated.

Vij further argued that the government plans to rationalise GST rates on MMF products as part of the Next-Gen GST Reforms from September 22, 2025. “If any anti-dumping duty is levied on MEG, the basic raw material, the industry will not benefit from the new GST rates. Instead, this will hamper the growth of the MMF sector and lead to a loss of potential job creation,” he cautioned.

ALCHEMPro News Desk (KUL)