A Northern India Textile Mills’ Association (Nitma) delegation recently met Ravi Capoor, Secretary Textiles to discuss issues facing India’s textile sector. The Nitma delegation comprised president Sanjay Garg, vice-president Mukesh Kumar Tyagi, and others spoke on the anomaly in the FTA (free trade agreement) with Indonesia and Vietnam, resulting in the closure of MSME spinning mills.
The secretary assured them India will enhance textile sector competitiveness across the entire value chain. Yarn manufacturing sector will be provided a level playing field. Nitma pointed out the surge of imports, particularly from Indonesia and Vietnam, has hit Indian spinning mills. This surge has been happening of late, as some existing duties — which acted as a safeguard against imports in the pre-GST period — were removed. Post-GST, with the removal of Cenvat and SAD, polyester yarn is being cleared with zero duty.
Operating profits of polyester yarn manufacturers in India are set to rise next fiscal. Reasons include a rise in operating margins, a healthy demand for polyester, and higher blending in garments and other products. The price of purified terephthalic acid (PTA) – a key raw material that accounts for more than half of the sales price of polyester yarn – is expected to be under pressure in the near term. Moreover, PTA capacities in Asia are set to rise 20 per cent over the next couple of years, which will keep prices in check.