The duty exemption, announced amid ongoing supply disruptions in West Asia, is expected to ease input costs for polyester manufacturers. PTA and MEG are critical raw materials used in the production of PSF, a key segment within India’s MMF ecosystem.
India’s duty exemption on PTA and MEG offers temporary relief to polyester manufacturers, easing input costs amid supply disruptions.
However, NITMA warns that the inverted duty structure under the India-ASEAN FTA continues to hurt domestic mills.
Industry seeks policy correction as benefits have not fully passed down the value chain.
Downstream price corrections remain absent.
Industry bodies, including the NITMA, while welcoming the move, have cautioned that the benefit may remain limited unless deeper policy distortions are addressed. NITMA noted that the exemption, currently valid until June 30, 2026, should be extended if global volatility persists to ensure sectoral stability.
A major concern flagged by stakeholders has been the long-standing inverted duty structure under the India-ASEAN Free Trade Agreement. At present, PSF attracts a customs duty of 5.5 per cent, while finished PSY is imported duty-free, creating a disadvantage for domestic spinning mills.
Industry leaders argue that without correcting the duty imbalance, domestic manufacturers will continue to face eroding competitiveness against imports. NITMA has urged the government to ensure parity by aligning duties on PSF and PSY, either by including both under exemptions or excluding both, particularly as the ASEAN–India Trade in Goods Agreement (AITIGA) undergoes review. While the duty exemption marks a positive step towards easing cost pressures, the broader consensus within the industry is that comprehensive policy correction is essential to restore balance and strengthen the ‘Make in India’ vision in the MMF segment.
Meanwhile, industry leaders expressed concerns as expected price corrections in downstream segments had not materialised despite the duty relief on raw materials. Former Southern Gujarat Chamber of Commerce and Industry (SGCCI) president Ashish Gujarati told Fibre2Fashion, “Yarn prices should have declined by at least 5 per cent following the exemption, but this has not occurred.” He added that MMF stakeholders have raised the issue with the Textile Commissioner, seeking intervention to ensure that input cost benefits are passed along the value chain.
Fibre2Fashion News Desk (KUL)
