Ashwin Chandran, Chairman, The Southern India Mills’ Association (SIMA) has stated that the Association has sent several representations to the government and also to the Union Ministers for Finance, Commerce and Textiles appealing to remove the anti-dumping duty levied on viscose staple fibre (VSF) that has been in existence for the past 10 years.
He said that VSF is produced by a single manufacturer in the country and they monopolize the customers with their pricing policy. MSME spinners who don’t have the negotiation power with the monopoly supplier suffer the most and thereby the power-loom fabric exports become uncompetitive and affected. He has also pointed out that there are several polyester fibre producers in India and the spinners are able to get competitive prices unlike VSF.
Having a single supplier has got lot of demerits. The domestic fibre manufacturer adopts a highly complicated domestic pricing policy. They promise discounts to the tune of 40% while withholding over 1/3rd of it till the year end leading to the blockage of the working capital. They link the discount to the incremental fibre consumption with a one-sided penalty clause and prevent sourcing from other suppliers with an annual contract.
Ashwin stated that the entire globe follows the VSF price based on wood pulp prices which has been on the declining trend globally; the indigenous manufacturer always keeps the price much higher than the international price taking advantage of the anti-dumping provision. Even though the domestic producer is planning to add new capacities, they will continue to monopolize the domestic value chain unless ADD on viscose fibre is removed.
Removing the ADD on VSF will make the domestic VSF prices aligned with Global VSF Prices making the entire Indian VSF textile value chain globally competitive and boost production and exports of these products.