India sets import price floor for synthetic knitted fabrics to ward off dumping

MUMBAI (ICIS)–India has imposed a minimum import price (MIP) of $3.50/tonne on selected synthetic knitted fabrics over the next six months, in response to a petition from the domestic industry to halt flooding of cheap material, primarily from China.

• Man-made fabric imports from China post rapid growth in recent years
• India demand surges following spikes in cotton prices
• Local players hope for extension of six-month measure

The floor price applies to five specified HS [harmonised system] codes of synthetic knitted fabric with immediate effect, according to a notification from India’s Ministry of Commerce & Industry dated 16 March.

Up to 15 September, importing synthetic knitted fabrics that fall under these categories is prohibited unless their cost, insurance and freight (CIF) value is $3.50/kg or higher.

Local industry players were hopeful that the measure would be extended beyond mid-September.

“The decision to impose MIP will effectively curb the import of undervalued synthetic knitted fabrics being dumped into India, providing much needed relief to the industry that has suffered from this practice for years,” Northern India Textile Mills Association (NITMA) president Sanjay Garg had said on 16 March.

The measure would protect the domestic manmade fabric (MMF) industry from a flood of cheap imports, according to local industry players.

India’s MMF imports from China more than doubled to 686 tonnes/day in the current fiscal year ending March 2024, from 325 tonnes/day in 2019-20, according to industry body All India Knitters Association (AIKA) in complaint filed with the government dated November 2023.

For dyed synthetic knitted fibres with HS code 60063200, imports from the northeastern country had surged to 504 tonnes/day from 203 tonnes/day over the same period, the association said.

India also imports MMF from Indonesia, Thailand, Vietnam, Japan and South Korea, but the volumes from these countries were largely stable over the past four years.

Demand for synthetic fabrics in India surged in early 2023 largely following spikes cotton prices, which forced many domestic small and medium enterprises to switch to cheap imports of synthetic fabrics, to meet domestic demand at lower cost.

Punjab Dyers’ Association (PDA) secretary Bobby Jindal said: “In the absence of an MIP, synthetic fibre and fabric was being imported at one-tenth the domestic prices which had crippled the domestic industry.”

“This move [MIP imposition] aims to reduce the influx of low-cost imports and safeguard the interests of domestic producers,” an official from India’s Ministry of Textiles said on Thursday.

“We expect to see some changes in the pricing and sourcing patterns of importers in response to the new regulations following which a decision may be taken regarding the extension of the MIP,” the government official said.

“Unless there are any notifications to extend the MIP, the free import policy will resume on September 16,” he added.

The Federation of Gujarat Weavers Association has also been running a campaign against dumping of products from China, and in December 2023, there were talks of weaving units needing to cut production by nearly 20% due to unsold stocks.

India is the world’s third-largest exporter of textiles and apparels with about a 5% share of the global pie in 2022-23, with hubs located in Ludhiana in the northwestern Punjab state; Surat in the western Gujarat state; and Erode in the southern Tamil Nadu state.

Its exports of MMF textiles and apparel stood at about $10bn in the fiscal year ending March 2022.

Focus article by Priya Jestin