Pallipalayam in Tamil Nadu reels under China’s viscose yarn dumping amid US-China trade war

Pallipalayam in Tamil Nadu, a major hub for viscose spun yarn (VSY), is under stress as Chinese dumping floods the market amid the ongoing US-China trade war. With over 60 spinning mills, the town consumes nearly 2,000 of India’s 2,200 tonnes of daily viscose staple fibre (VSF) output. The mills, which sell VSY at Rs 198 per kg while manufacturing costs touch Rs 205, are facing steep losses as China reportedly dumps poor-quality yarn at Rs 185 per kg at ports like Kandla and Mundra.

Ramesh Natrajan, Executive Director of AGT Mills, and K Venkatachalam from the Tamil Nadu Spinning Mills Association, urged the Centre to impose anti-dumping duties. Industry leaders warn that without intervention, this vital segment could collapse.

Prabhu Dhamodharan of the Indian Texpreneurs Federation highlighted past successes in curbing polyester and knitted fabric dumping and called for immediate action.

Despite a 2020 recommendation from the Directorate General of Trade Remedies for a $0.41–$0.80/kg anti-dumping duty, no enforcement followed. The domestic VSY market, projected by Crisil to exceed $2.5 billion in 2023, is now pegged at over $3 billion. Stakeholders demand urgent protection to sustain this key textile cluster.