Reconsider imposing ADD on MEG, urges PTAIA

India's textile industry has urged the government to reconsider imposing an anti-dumping duty (ADD) on Mono Ethylene Glycol (MEG), a vital raw material for polyester staple fiber. The industry warns, ongoing shortage of MEG would worsen due to the duty, creating supply chain issues. The Directorate General of Trade Remedies (DGTR) has issued a ‘Disclosure Statement,’ and a final government decision is expected soon.

R K Vij, Secretary General, Polyester Textile Apparel Industry Association (PTAIA), points out, MEG is used to produce polyester fibers, chips, and yarn. These are then processed into garments and fabrics, making the man-made fiber (MMF) sector a key driver of India's textile industry.

Currently, only three companies viz, Reliance Industries (RIL), Indian Oil Corporation (IOCL), and India Glycols (IG) manufacture MEG in India. The largest producer, RIL uses about 60 per cent of its own output, leading to a significant domestic supply shortage of around 1.2 million tons per year. Projections for 2025–26 show a similar deficit.

The industry cautions, an ADD on MEG could put approximately $2.4 billion in new investments at risk and jeopardize the creation of 300,000 jobs. Vij also says, the potential duty would undermine the benefits of the government's upcoming GST rate rationalization for MMF products. Imposing the duty would hinder the growth of the MMF sector and prevent new job creation, making it counterproductive to the government's own reform efforts. The PTAIA is requesting that the government support the MMF industry by not levying any ADD on MEG.