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India may impose anti-dumping duty on yarn from China, Indonesia, Vietnam

An anti-dumping duty is a protectionist duty that a domestic government imposes on imports that believe it is below a fair market price.

The Indian government may impose anti-dumping duties on viscose spun yarn to protect domestic players from cheap imports from China, Indonesia and Vietnam. The duty was demanded by the Manmade Yarn Manufacturers Association of India as the import of viscose yarn from these countries has hurt domestic manufacturers.

India-impose-anti-dumping-duty-China-Indonesia-Vietnam
Figure: Indian government may impose anti-dumping duties on viscose spun yarn to protect domestic players from cheap imports from China, Indonesia and Vietnam. 

Following the investigation, the Department of Trade Remedies under India’s ministry of commerce & industry recommended the move.

Viscose spun yarn originating or exporting from China, Indonesia, and Vietnam will attract duties ranging from $0.25 to $0.80 per kg for five years from the date of notification issued by the central government, DGTR said in its final investigative data.

The product under consideration is viscose spun yarn which is not kept for retail except by sewing thread by weight of synthetic viscose staple fiber by 85 percent or more by weight. Demand for viscose fabric has risen sharply in recent months.

Viscose-cotton blended yarn production is currently limited to a few spinning mills in and around Erode. These spinning mills can meet only 50 percent of the domestic demand, which has resulted in increased imports.

The price of viscose yarn, which was around $1.98 per kg, has risen to $3.01 per kg today due to the government announcement. Now is not the right time to impose anti-dumping duty on viscose cut yarn. Chairman of the Garment Export Promotion Council A. Sakthivel, said the proposed tariff would affect viscose garment production in the domestic and export markets.

India is the third-largest textile exporters in the world. Fabric is one of the dominant export product of India. It will impact the fabric exports of India.

Value-textiles-exported-India-2019

Already raising the price of cotton has taken a toll on garment manufacturers further pushing up the prices of yarn and fabric. In this situation, garment manufacturers are not focusing on domestic fabric manufacturers due to the high price of yarn.

If the situation continues, Bangladeshi garment manufacturers will migrate to India. A total of 28-30% of the fabric comes from India to Bangladesh’s garments sector. On the other hand, as prices in India have risen due to anti-dumping duties, orders will move to China and sources.

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