NITMA UPDATE LEVEL PLAYING FIELD IS ESSENTIAL FOR IMPROVING THE COMPETITIVENESS OF THE POLYESTER YARN AND ACRYLIC FIBRE SECTOR The Northern India Textile Mills’ Association, popularly known as NITMA is an apex association of North India serving the interest of textile units. All the large textile mills in the Northern part of India are associated with NITMA and the combined turnover of its members is approx. 50,000 crores (USD 8 Billion). Formed in 1958, the association represents industry for all policy matters and disseminates information apart from conducting conferences, exhibitions, seminars & workshops. A NITMA delegation led by Shri. Sanjay Garg, President NITMA, had a fruitful meeting with Sh. Ravi Capoor, Secretary Textiles to resolve the critical issues concerning the Textiles Mills sector. The other members in the delegation were Sh. Mukesh Kumar Tyagi, Sr. Vice President, Sh. Sidharth Khanna, Director Arisudana Industries Ltd., Dr. Ravinder Verma, MD, Ganga Acrowools Ltd. And Sh. Anil Kumar Vasupillai, SG, NITMA.
1. The anomaly in the FTA agreements with Indonesia & Vietnam leading to closure of MSME Spinning Mills: On the issue of an existing anomaly due the ASEAN FTA, it was explained that due the inclusion of the finished product of the mills, i.e. Polyester Staple Yarn-HS code - 55092100, in the list of items in the said FTA, it has been cleared of imports with ASEAN certificate @ zero duty. Hence there has been a surge in imports particularly from Indonesia and Vietnam, mostly in the post-GST period. It was indicated that, while the Yarn is cleared zero duty, its immediate raw material viz. Polyester Staple Fibre HS code is being imported at full duty of 5.5% since it is NOT included in the list of items of the FTA. This has de-
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nied a level playing field for the Indian Spinning Mills as compared to their counterparts in Indonesia etc. It was mentioned that this surge in imports has been happening of late, as some of our existing duties which were acting as a safeguard against imports in the pre-GST period were removed, while the government introduced the GST. Post-GST, with the removal of CENVAT and SAD, polyester yarn is being cleared @ zero duty. NITMA suggested for urgent exclusion of Polyester Staple Yarn (PSY) from the FTA list or inclusion of its raw material, the PSF, in the FTA list of items. It is submitted that this would allow strengthen the vision of ‘’Make in India’’ and also provide the much needed competitiveness to the Spinning Mills products, which has been undergoing stress due to this grave anomaly, affecting its future and survival. As huge capacity are being added in our competing countries. Secretary assured that the Textile Ministry is ready to facilitate the industry by all means to enhance the growth competitiveness of industry and hence necessary steps are being taken to unleash the growth of the Manmade Textiles sector, which has huge potential for growth in India. He informed that important decisions are expected in the next GST council meeting which will further help to improve the competitiveness across the entire textile value chain. Secretary further said that it may be difficult to make the changes in the ASEAN agreement and it may also take little longer to review the current ASEAN Trade agreement. He reiterated that he has understood the difficulties being faced by this segment and is sincerely willing to provide Yarn manufacturing sector with level play-
ing field. He mentioned that it may be possible to identify other trade related measures to arrest the surge in imports, which have been affecting the competitiveness of the Mills sector and the entire value chain. He suggested NITMA to point out some Non Tariff Barrier (NTB) measures, such as, checking the quality standard of the imported yarn, which if introduced as a compliance measure could help make the hike in imports yarn reversed. Secretary while discussing a way forward for resolving the issue has suggested that NITMA may carry out a study to identify the kind of NTBs which include the Environment related, Quality of the Yarn, Labour or Safety and health standards certifications which India can introduce and can make it mandatory and to be adhered by the exporting units of various countries. He said this could clearly work and hence can be introduced to arrest huge imports. He also mentioned that in such an event, while India mandates that the exporting countries to comply with these NTB measures, it is also bound upon Indian industry to comply with these measures, which involve certain compliance cost and which would definitely pay off in the longrun as the industry become globally competent in the event of increasing sustainable processes and compliant measures which are being sought by International Brands etc.
2. Level playing field for MMF industry by removing the Antidumping duty (ADD) on Acrylic Fibre for enhancing competitiveness in the value chain. NITMA delegation explained to Secretary that the imposition of ADD on the Acrylic Fibre, which is also known
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February 2020
