The Anti-Dumping Duty Debate on MEG: A Challenge for India's Man-Made Fibre Sector
UPSC Relevance
Prelims: Indian Economy (Foreign Trade - Anti-dumping duty, WTO; Industries - Textile Industry, Man-Made Fibre (MMF)); General Science (Chemicals in news - Mono Ethylene Glycol (MEG), Purified Terephthalic Acid (PTA)).
Mains:
General Studies Paper 3 (Economy): Indian Economy and issues relating to growth, development; Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.
Key Highlights from the News
The Indian textile industry has urged the government not to impose Anti-Dumping Duty (ADD) on Mono Ethylene Glycol (MEG), a key raw material used to manufacture polyester yarn and fabrics.
Imposing ADD would increase MEG prices by 20%, negatively impacting the growth of the Man-Made Fibre (MMF) sector.
India meets 40% of its annual MEG requirement through imports. There are no new plans to increase domestic production for the next 3-4 years.
In the 2020 budget, the government removed ADD on Purified Terephthalic Acid (PTA), another key raw material for polyester. The industry demands the same policy for MEG.
The government recently reduced GST on MMF yarn and fabrics. Imposing ADD on raw materials now would contradict this policy.
To maintain global competitiveness for the domestic MMF industry, the industry demands that raw materials be available at international prices.
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