India has imposed an anti-dumping duty on imports of various items including fiber boards, front axle beams, steering knuckles meant for heavy and medium commercial vehicles, and fully drawn or fully oriented yarn or flat polyester yarn. With the anti dumping duty on polyester yarn, the basic raw material for the manmade fiber sector, weavers in the powerloom sector have to heavily depend on domestic manufacturers.

Yarns and fibers, including nylon filament yarn, polyester filament yarn, polyester yarn, viscose filament yarn, manufactured in China are 20 per cent cheaper than the ones manufactured by domestic players. Following the imposition of the anti-dumping duty, domestic manufacturers of yarns and fibers have got a free hand to increase prices, especially when the demand increases from the local market. Domestic spinners take advantage of the anti-dumping duty since import of yarn from China and other countries becomes a costly affair. They want to earn as much profit as possible from weavers.

One reason for the anti-dumping duty on imports of yarn is to guard the domestic market from being flooded by cheap Chinese raw material used in the textile sector. The anti-dumping duty means that the cost of the product in the entire polyester value chain will go up, making exports uncompetitive.