India's DGTR recommends ADD on MEG; yarn industry opposes move

DGTR concluded that imports of MEG from Kuwait, Saudi Arabia, and Singapore were being dumped in the Indian market, causing injury to domestic producers. The findings follow a year-long investigation initiated at the request of the Chemicals and Petrochemicals Manufacturers Association of India (CPMA), primarily supported by Reliance Industries Limited (RIL).

The investigation began in September last year, following allegations that exporters from Kuwait, Saudi Arabia, and Singapore were selling MEG in India at unfairly low prices. MEG is a key raw material for polyester yarns, PET resins, and antifreeze, making it critical for India’s textile and packaging industries. RIL, which accounts for over 70–80 per cent of domestic production, argued that low-priced imports had depressed local prices and hurt profitability.

DGTR determined that exporters from these countries sold MEG at prices significantly below the normal value, with dumping margins ranging from 20–50 per cent. It found that, despite increased domestic capacity, unfairly priced imports had undercut prices and eroded profitability for Indian producers.

RIL, supported by CPMA, claimed that government intervention in Gulf markets distorted raw material costs, giving exporters an unfair advantage. Exporters, however, argued that their prices reflected true market conditions and attributed the decline to global price trends rather than dumping.

According to DGTR’s recommendations, ADD should be imposed on MEG, ranging from $102–173 per ton or ₹9–15 per kg.

Following the recommendations, R K Vij, secretary general of the Polyester Textile Apparel Industry Association (PTAIA), told Fibre2Fashion: “Indian MEG is already costlier by ₹4–5 per kg. The proposed duty will further increase the price by another ₹4–5 per kg. The government should not accept the recommendations as it will hamper the growth of the entire textile value chain.”

“Rationalised GST has brightened prospects for the MMF textile industry. India can expect rapid growth in the MMF segment after the GST cut. But the proposed duty will nullify these benefits. If the government accepts the recommendations, yarn and fabric imports will rise from China and other countries, and the Indian MMF textile and garment industry will struggle to compete globally,” he added.

Vij said that industry representatives will meet Finance Minister Nirmala Sitharaman to urge the government not to impose ADD as recommended. MEG manufacturers have attempted to push for ADD earlier, but the government had rejected such measures.

ALCHEMPro News Desk (KUL)