A plea by Reliance Industries
and Mitsubishi’s MCC PTA India Corp (MCPL) to impose an anti-dumping duty on imports of a key raw material for producing man-made fibre from select countries has come under fire from more than a dozen user companies.
In a meeting with commerce and industry minister Anand Sharma last week, these companies said imports of the purified terephtalic acid (PTA) — used in making polyster staple fibre (PSF), filament yarn (PFY) and film — were already taxed at 5% despite a domestic shortage. Thus, an anti-dumping duty over and above the import duty would raise the import tariff to a higher level and would be “disastrous” for the industrial users, which are already struggling to pass on the rising costs to downstream consumers.
The PTA users, including Indo Rama Synthetics, Filatex India, JBF Industries and Shubhalakshmi Polyesters, expressed fears that the high cost of this key input could further undermine India’s export competitiveness in synthetic textiles that form major chunk of the global textile and clothing market. India’s performance has been far below its potential in this mass-use apparel segment, dominated by China.
The users wrote to Sharma that RIL, by attempting to get anti-dumping duties imposed on PTA only from China, the EU, Korea and Thailand, is also seeking to benefit its recently-acquired PTA plant in Malaysia.
Indo Rama Synthetics chairman OP Lohia said: “This would be ironical, as RIL has been operating its PTA plants at more than 100% capacity.”
A questionaire sent on Thursday to RIL spokesperson Tushar Pania remained unanswered. Anti-dumping duties have been traditionally imposed on filaments and fibres, but PTA has been excluded in recent years.
Of the three producers of the PTA in the country, RIL and MCPL have filed a petition before the directorate general of anti-dumping and allied duties for the impost, although IOC, the third producer, hasn't. RIL alone accounted for 60% of domestic PTA production in 2012-13, while MCPL made up for another 24%.
India produced 3.47 million tonnes of PTA in 2012-13 compared with the demand of 4.12 million tonne and the same level of shortage continued through the last fiscal as well, users said.
“When RIL is running at more than 100% capacity and is undertaking expansion, how does it justify its claim of injury to domestic producers? Moreover, imports of PTA have come down from the 2010-11