The Directorate General of Trade Remedies (DGTR) has recommended to levy US $ 0.512 per kg anti-dumping duty (ADD) on Viscose Staple Fibre (VSF) imported from Indonesia.
DGTR made this recommendation based on the appeal made by the associations of MMF industry, Customs, Excise and Service Tax Appellate Tribunal (CESTAT).
The Southern India Mills’ Association (SIMA), has appealed to the Union Finance Minister to reject the unrealistic recommendation made by DGTR and ensure the survival of MSME spinning mills, decentralised powerloom and handloom sector and also the garment sector.
In a statement, Ravi Sam, Chairman, SIMA stated that levying ADD levy gives a protection to the tune of 28 per cent to the indigenous VSF manufacturers. He has pointed out that the majority of the imported raw material, machinery, etc., attract only 5 per cent to 7.5 per cent basic customs duty while such an abnormal protection is totally unwarranted for, and on the contrary, this would greatly affect the entire VSF value chain.
It is pertinent to note here that over two lakh powerlooms in the State of Tamil Nadu had diverted to VSF fabric manufacturing and enabled value added exports. The ADD levy would again make the fabric manufacturers to switch over to imports that would have serious impact on the MSME spinning mills. The majority of the MSME spinning mills could blend Viscose Staple Fibre with cotton to the tune of 10 per cent to 15 per cent and sustain their competitiveness which would be eroded with the recommended ADD.
It is being also said that the indigenous VSF fibre manufacturers are not in a position to meet the growing demands of the VSF value chain, rationing their supply and affecting the potential growth of the industry.
The indigenous fibre manufacturers have been supplying fibre only to less than 300 spinning mills, while the country has around 4000 spinning mills.
“Any spinning mill in the country could buy any quantity of polyester staple fibre at an internationally competitive rate. After the removal of ADD on VSF, any SSI spinning unit or open-end spinning unit could also buy VSF staple fibre at an international price and cater to the needs of handloom and powerloom sector,” said Ravi.
