India’s man-made fibre (MMF) textile sector, a demanding patron valued at approximately $60 billion, faces an intimidating challenge: a sharp increase in low-cost fabric imports, largely originating from China. This influx agitated the market equilibrium, sceptically impacting domestic players across the value chain – spinners, knitters, weavers, and processors – who struggle to compete on price in both the domestic and export markets.
Growing Inventory and Production Slowdown:
Major textile hubs, including Ludhiana, Surat, and Erode, report a significant rise in unsold stock due to the import glut. Consequently, manufacturers are calculating production cuts to reduce losses, potentially leading to job reductions and economic complications.
Price Disproportion and Potential Dumping Allegations:
Industry experts raise concerns regarding the substantial price dissimilarity between domestically produced and imported MMF fabrics. This price difference suggests potential dumping practices by Chinese manufacturers, who may benefit from lower raw material costs or unfair trade practices. For instance, weavers report significant price disparity for yarn, with domestic costs reaching ₹180 per kg compared to a mere ₹125 per kg for yarn sourced from China.
Import Trends and Industry Response:
Data paints a concerning picture: MMF fabric imports, particularly knitted synthetics, have witnessed an amazing doubling in the past three years. Daily import volume from China has escalated from 325 tonnes to a concerning 887 tonnes, with certain fabrics priced as low as $1.4 per kg. The Federation of Gujarat Weavers Association expresses significant alarm, outlining plans to reduce production by 20% in response to the import pressure.
Potential Crisis and Command for Solutions:
The influx of low-cost imports poses a compelling threat to the durable sustainability of India’s textile industry. The resulting unsold inventory and potential production cuts could cascade into a full-blown crisis if left unaddressed. The industry urgently requires solutions to counter unfair pricing practices and enhance its competitive corner in the global marketplace.
