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'Dumping, high excise duty are ripping polyester market apart'

Dumping of products by traders from Korea, Thailand, Indonesia and Taiwan has turned the domestic market uneconomical for the Rs 60 billion polyester industry in India.

Eighteen of the 36 units in the country became sick in the last two years.

The polyester industry is in a shambles. The southeast Asian countries have made India a dumping ground for their huge surplus products and the consequent low prices, according to M B Raju, chairman of Association of the Synthetic Fibre Industries.

Heavy under-invoicing and other manipulations are causing losses both in excise and customs revenues, besides depressing the prices in the domestic market, Raju said.

Raju asked the government agencies concerned to adopt more proactive policies to guard against the ill-effects of economic crises of other nations, within the framework of the General Agreement on Trade Tariffs.

There are well-defined provisions under the GATT to impose specific import duty to protect the domestic industry against unfair competition from imports. Many developed markets like the USA and European countries are often resorting to such measures.

The classification of the industry under the demerit list in the recent Budget has placed a very high excise level of 34.5 per cent, though polyester fibre is accepted as an essential clothing used by the common man.

Colour televisions and refrigerators which are one-time buy-out items, attract only 16 per cent total excise duty. Why should polyester attract 34.5 per cent duty? Raju asked.

Presently, the industry is losing around Rs 5 billion and the exchequer Rs 1.75 billion due to lower excise realisation annually.

UNI

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