Indian Government Exempts Polyester Imports, Boosting Textile Exporters

In a significant move aimed at bolstering India's textile export sector, the government has announced exemptions for the import of polyester staple fibre (PSF), filaments, and spun yarn under the Advance Authorisation Scheme. This decision, heralded by industry organizations such as The Southern India Mills’ Association (SIMA), marks a pivotal moment for textile exporters grappling with sourcing raw materials amid stringent quality control orders (QCOs).

The Ministry of Chemicals and Fertilisers issued Notification No. 16/2024 dated 6th June 2024, granting exemption from QCOs for imports of these crucial raw materials destined for export-oriented production. Notably, this move comes in response to exporters' challenges in procuring raw materials from global suppliers post-QCO implementation.

Under the new provisions, user industries will be relieved from QCO obligations for imports of these raw materials, provided they undergo one stage of value addition before export. Furthermore, consumer industries are mandated to adhere to pre-import conditions, utilizing the imported fibres exclusively for export purposes. Additionally, the export obligation period has been significantly reduced from 18 months to just 6 months for all types of man-made fibre (MMF) imports under the Advance Authorisation Scheme.

This exemption complements a prior move by the Ministry of Textiles, which exempted viscose staple fibre (VSF) imports under the Advance Authorisation Scheme via Notification No. 71/2023 dated 11th March 2024. The combined effect of these measures aims to streamline the procurement process for raw materials, providing much-needed relief to MMF textile exporters.

Dr. SK Sundararaman, Chairman of SIMA, expressed gratitude to the government for heeding the Association's representations. He underscored the relief provided to MMF textile exporters, enabling them to enhance their export performance, which had been hampered in recent years. The Association has long advocated for smoother access to raw materials at globally competitive rates to foster sustainable growth in both domestic and export markets.

However, challenges persist, particularly regarding quality control standards for raw materials. The Ministry of Chemicals and Fertilisers had implemented QCOs for PSF in the latter half of the previous year, mandating purchases from Bureau of Indian Standards (BIS) license holders. This posed hurdles for manufacturer-exporters reliant on specialty fibres and filament yarns not domestically produced, adversely affecting export performance.

Ashish Gujarati, former President of the Southern Gujarat Chamber of Commerce & Industry, emphasized the significance of these exemptions in enhancing competitiveness in global markets. He stressed the need for broader exemptions, advocating for quality standards on finished consumer products to ensure competitiveness in both domestic and international markets.

The government's proactive measures signal a concerted effort to bolster India's textile export sector, providing much-needed relief to exporters and paving the way for sustained growth and competitiveness on the global stage.