The Ministry of Chemicals and Fertilizers (Department of Chemicals and Petrochemicals) had issued Quality Control Order for Polyester Staple fibres, various filament yarns and spun yarn vide their Notification dated 15.04.2021 (effective date for implementation for the fibre from 03.07.2023 and for filament & spun yarn from 05.10.2023), thus mandating every user to purchase the raw materials only from BIS licence holders, both from the domestic and international markets. Though the domestic manufacturers of the said products have obtained BIS licence, the applications submitted by several foreign manufacturers are still pending before the BIS authorities for inspection and approval. This has severely affected the manufacturer-exporters, who are the consumers of speciality fibres / filament yarns and spun yarns, as specified by the buyers especially the overseas buyers and global brands, the said raw materials not being manufactured in the country. This has disrupted the smooth flow and availability of MMF raw materials, thereby seriously impacting the export performance of the MMF value chain. Similarly, the QCO issued for Viscose Staple Fibre by the Ministry of Textiles had been affecting the entire VSF value chain, particularly the exporters. The industry has been consistently pleading the Ministry of Textiles and the Ministry of Chemicals & Fertilizers to issue licence for all the applicants and at least exempt the manmade fibres and filaments used for only export purpose from the mandatory Quality Control Orders.
In a Press Release issued here today, Dr.S.K.Sundararaman, Chairman, The Southern India Mills’ Association (SIMA) has thanked the Government for considering the representations made by the Association and exempting the Viscose Staple Fibre imported under Advance Authorization Scheme vide Notification No 71/2023 dated 11.03.2024, effective from the date of the Notification. Dr.Sundararaman also thanked the government for exempting the polyester staple fibre, filaments and spun yarn imported under the Advance Authorization Scheme vide Notification No 16/2024 dated 6.06.2024. He has said that for the MMF imports permitted under the Advance Authorization Scheme, the users are bound to adhere to pre-import conditions (using the imported fibres only for export purpose) and also the period for fulfilment of export obligation has been reduced from 18 months to six months for all types of MMF imported under Advance Authorization Scheme. Further, the exemption should be specifically endorsed on the Advance Authorisation License.
SIMA chairman has said that the announcement in this regard has given a relief to the MMF textile products exporters enabling them to improve their export performance that had been significantly affected in the last two years. He also added that the Association has been demanding the Government to facilitate smooth supply of raw materials at an internationally competitive rate to achieve a sustainable growth rate, both in domestic and export markets, to enable the achievement of increased textile business size to USD 350 billion from the current level of around USD 160 billion including the exports from USD 35 to 37 billion to USD 100 billion. He has pointed out that owing to 10% to 23% higher raw material price, India could not increase its MMF exports that accounts only 20% of the total export, while countries like China, Bangladesh, Vietnam, etc., have garnered 70% to 80% share in the MMF segment that had facilitated these countries to achieve exponential growth rate, while Indian exports got stagnated for almost a decade and India has been pushed to sixth position in the global trade from the second position during the last decade.
Dr.Sundararaman has appreciated the pathbreaking policy decision of removing anti-dumping duties on all the MMF raw materials fibres and filaments and also reducing the import duty on MMF to 5% to have a win-win strategy both for the domestic producers and the textile value chain, that employ over 115 million people, especially the rural masses and the women folk. However, the Quality Control Order imposed on the raw materials had shattered the performance of the industry. Dr. Sundararaman has appealed to the new government to address all the structural issues relating to MMF including the duty inversion issue by slotting the entire MMF value chain under 5% GST rate on par with cotton and also ensure smooth supply of raw materials without any hindrance. SIMA chairman has pointed out that slotting the entire textile value chain under 5% GST rate will not affect the revenue to the government but would enable the poor masses of the Nation to cloth themselves at affordable cost apart from enabling the industry to boost its exports exponentially. Further, removal of 11% import duty on cotton would enable the cotton and cotton blended textile products manufacturers to increase their share of exports.