Amitabh Kant calls for policy rethink to boost India's MMF textile sector

India’s ambition to become a global textile manufacturing powerhouse is facing a formidable bottleneck—not in creativity or capacity, but in cost and compliance. The country's man-made fiber (MMF) segment, which holds the key to tapping the $1.5 trillion global textile and apparel market, is stifled by two major policy hurdles: steep input costs and restrictive Quality Control Orders (QCOs).

Former NITI Aayog CEO and G20 Sherpa Amitabh Kant has voiced sharp concerns over this paradox. “We’re trying to build a 21st-century textile industry with 20th-century constraints,” he remarked at a recent industry gathering. “The issue is not at the loom, but at the root—our MMF raw materials are simply too expensive and too inaccessible.”

A premium that hurts competitiveness

While cotton has historically dominated India’s textile sector, MMFs like polyester and viscose are the backbone of modern global apparel. They account for 70 per cent of global textile consumption, but in India, that number is inverted—only 40 per cent of India’s fiber usage is MMF-based. One of the core reasons is cost.

India’s MMF raw materials are, on average, 25 per cent more expensive than those available to global competitors. This premium snowballs across the value chain—from spinning to weaving to export—making Indian MMF products pricier and less attractive in the global marketplace.

Table: MMF’s share global vs India

Source: Industry reports and government data (approximate figures)

QCOs quality measures or non-tariff barriers?

Originally intended to improve product standards, QCOs have emerged as a new choke point. These mandates require both domestic and foreign MMF producers to acquire Bureau of Indian Standards (BIS) certification to sell in India. While domestic players have generally complied, many overseas suppliers—especially from Southeast Asia—face long bureaucratic delays in obtaining certification.

Polyester supply chains snarled

When the Quality Control Order (QCO) for polyester fibre and yarn came into force in April 2023, it set off a chain reaction that continues to reverberate through India’s textile sector. Intended to enhance product standards and traceability, the policy ended up snarling supply chains instead.

Importers found themselves caught in a bind, unable to locate foreign suppliers that met the stringent certification requirements of the Bureau of Indian Standards (BIS). As certified suppliers abroad were few and far between, imports slowed to a trickle.

With reduced competition from imports, domestic polyester producers seized the moment to raise prices, triggering a surge in input costs across the textile value chain. At the same time, many Indian manufacturers, particularly small and mid-sized mills, were left with idle capacity. Short on raw materials, they simply couldn't keep their operations running at full throttle.

A measure of relief came over a year later, in June 2024, when the government announced an exemption under the Advance Authorisation Scheme (AAS). This allowed polyester imports for the production of goods meant strictly for export. But for most of the domestic industry, the pain continued.

Viscose, monopoly concerns and mounting costs

Viscose staple fibre (VSF) has not escaped the chokehold of QCOs either. India’s viscose market is dominated by a single player—Grasim Industries—making it particularly vulnerable to policy bottlenecks. The first QCO on viscose came into effect in March 2023 and was later expanded in September 2024, further tightening the noose on imports.

Previously reliable sourcing destinations such as China and Thailand have now become inaccessible due to the absence of BIS certification. With import doors effectively shut, Indian spinners are left with few choices and one dominant supplier. The result: spiralling prices and growing concerns of monopolistic pricing.

For weaving and spinning units, especially in textile-heavy regions like Tamil Nadu, the cost pressures have been unbearable. Several units have slowed operations, laid off workers, or shut down entirely, citing raw material unavailability and unsustainable input costs.

In March 2024, the Directorate General of Foreign Trade (DGFT) attempted damage control by exempting VSF imports under the AAS. But the benefits are limited—only a select group of exporters qualify. “This is not a scalable solution,” warned a spokesperson from the Southern India Mills’ Association (SIMA). “We need QCOs to either be restructured or rolled back entirely.”

A Policy Puzzle: Who gains and who loses?

On paper, QCOs serve a valuable purpose—ensuring quality and safety. In practice, however, they’ve become a double-edged sword. While large, integrated firms with better compliance capacity may benefit from reduced competition, most micro, small, and medium enterprises (MSMEs) are bearing the brunt.

Even with India entering into Free Trade Agreements (FTAs)—such as those with ASEAN nations—that lower customs duties on imports of man-made fibres (MMF), QCOs act as non-tariff barriers. Without BIS approval, the cheaper imports promised by FTAs remain out of reach. “The intention was noble, but the execution has been exclusionary,” says a senior executive at a major export house. “It’s like giving us cheaper lanes on a highway and then locking the entrance gate.”

As India aspires to become a global textile leader, the current QCO regime poses a critical question: can quality control be ensured without choking competitiveness?

Table: Policy timeline and impact

Rethinking the road ahead

Kant’s policy prescription is clear: “Zero import duties and a rollback of QCOs on MMF raw materials.” The industry echoes this sentiment with increasing urgency. The current ecosystem discourages innovation, hinders competitiveness, and sidelines India from the fast-evolving global MMF apparel segment.

What needs to be done

• Remove import duties on MMF inputs: This will reduce cost burdens immediately.
• Reform or suspend QCOs: A consultative framework involving MSMEs could create balanced standards without stifling trade.
• Diversify domestic supply: Encourage more players to enter the MMF production space, reducing monopoly-like conditions.

“India cannot become a global textile leader with one hand tied behind its back,” said a policy analyst from the Confederation of Indian Textile Industry (CITI). “Access to competitively priced raw materials is not a luxury; it’s a necessity.”

Will India miss the MMF moment?

The MMF segment is no longer a niche—it’s the engine of growth for global apparel trade. Unless India rapidly addresses its policy bottlenecks, it risks losing out to faster, leaner competitors like Vietnam, Bangladesh, and China.

The future of India's textile industry may be spun from synthetic threads, but unless those threads are affordable, accessible, and globally compliant, the country’s grand textile ambitions could unravel prematurely.