The duty waiver, announced amid continuing 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 waiver on PTA and MEG offers temporary relief to polyester manufacturers, easing input costs amid supply disruptions. However, NITMA warns that the inverted tariff structure under the India-ASEAN FTA continues to hurt domestic factories. The industry is seeking a policy correction as the benefits have not been fully transmitted along the value chain. Subsequent price corrections remain absent.
Industry bodies including NITMA, while welcoming the move, warned that the benefit may remain limited unless deeper policy distortions are addressed. NITMA noted that the waiver, currently valid until June 30, 2026, should be extended if global volatility persists to ensure sectoral stability.
One of the major concerns flagged by stakeholders has been the long-standing inverted duty structure under the India-ASEAN Free Trade Agreement. Currently, PSFs are subject to a customs duty of 5.5 per cent, while finished PSYs are imported duty-free, creating a disadvantage for domestic spinning mills.
Industry leaders maintain that without correcting the tariff imbalance, domestic manufacturers will continue to face an erosion of competitiveness against imports. NITMA has urged the government to ensure parity by aligning tariffs on PSF and PSY, either including them under waivers or excluding them, particularly as the ASEAN-India Agreement on Trade in Goods (AITIGA) is reviewed. While the duty waiver marks a positive step towards easing cost pressures, the broader consensus within the industry is that a comprehensive policy correction is essential to restore balance and strengthen the ‘Make in India’ vision in the MMF segment.
Meanwhile, industry leaders expressed concern that expected price corrections in downstream segments had not materialized despite the easing of duties on raw materials. Former President of South Gujarat Chamber of Commerce and Industry (SGCCI) Ashish Gujarati said Fiber2Fashion“Yarn prices should have decreased by at least 5 percent after the exemption, but this has not happened.” He added that MMF stakeholders have raised the issue with the Textile Commissioner, seeking intervention to ensure that the benefits of input costs are passed along the value chain.
Fiber2Fashion News Desk (KUL)
