The Northern India Textile Mills’ Association (NITMA), in collaboration with other key trade bodies and industry associations such as PTAIA, CITI, SGCCI, and SIMA, recently met senior officials from the Ministry of Textiles and the Department of Chemicals and Petrochemicals to express strong opposition to the Directorate General of Trade Remedies’ (DGTR) recommendation to impose an Anti-Dumping Duty (ADD) on Mono Ethylene Glycol (MEG).
The industry’s primary concern lies in the sharp rise in production costs that the ADD would cause. MEG serves as a key input for polyester staple fibre (PSF), yarn, filament, fabrics, and garments. Industry representatives estimated that the proposed duty would increase MEG costs by around 20%, effectively forcing MMF units across India to cease operations.
The downstream sector, already burdened by uncompetitive raw material pricing under the Bureau of Indian Standards (BIS) quality control order, faces further strain. Before the BIS order, domestic PSF prices were already 15–20% higher than those paid by global competitors, such as manufacturers in China, due to freight and duty-related costs. Following the order, the absence of import competition from non-BIS countries has allowed domestic fibre producers to charge a premium of Rs. 6–Rs. 7 per kg over imported parity. The imposition of ADD on MEG, industry representatives warned, would further widen this premium to around Rs. 10–Rs. 11 per kg, severely undermining the viability of downstream MSMEs.
The proposed duty is also expected to delay over Rs. 20,000 crore (US $ 2.25 billion) in planned investments, including key projects under the Production Linked Incentive (PLI) scheme. Moreover, the industry cautioned that the consumer benefits from the recent reduction in GST would be entirely offset by higher production costs, while the market itself would become more concentrated, benefiting only one large domestic MEG producer at the expense of thousands of MSME units.
Domestic MEG production, estimated at 19.40 lakh metric tonnes per annum (LMTPA), falls well short of the national consumption requirement of 31.0 LMTPA, necessitating large-scale imports. With no new MEG plants in the pipeline, the industry argued that imposing ADD would exacerbate supply shortages. They also cited precedent, noting that an anti-dumping duty on Purified Terephthalic Acid (PTA)—another crucial MMF raw material—was withdrawn in 2020 to ensure competitive input prices.
Furthermore, domestic MEG producers already follow international price benchmarks, raising questions about the justification for alleging “dumping” in India alone. Industry bodies also highlighted a policy contradiction, pointing out that while the government recently removed the 11% customs duty on raw cotton to boost competitiveness, imposing an ADD on MEG, which is already subject to a 5% duty, runs counter to this objective.
A NITMA spokesperson stressed that the MMF segment, particularly polyester, represents the primary growth driver of the Indian textile industry, accounting for half of total textile consumption. The spokesperson further stated that an ADD on MEG would push up yarn and filament prices by Rs. 3.50 to Rs. 4.00 per kg, making the government’s US $ 350 billion textile trade target for 2030 “virtually impossible to achieve.”
