Date: 23/02/2023

Relevance: GS-3 : Indian Economy and issues, Textile Sector of India; Viscose Fibre.

Key Phrases: Association of Man-made Fibre Industry of India (AMFII), Cotton, Textile Industry, Viscose Fibre, Rayon, Technical Textile, Apparel Sector of India, Unsustainability of Textile Industry, Traceability, Recycling of Textile of Waste, Anti-dumping Duty.

Context:

• Recently, the Association of Man-made Fibre Industry of India (AMFII) has appealed to the Union Finance Ministry to accept the recommendations of the Directorate General of Trade Remedies (DGTR) on levy of anti-dumping duty (ADD) on imports of Viscose Staple Fibres.

Key Highlights:

• In India, the textile and apparel industry is a critical and integral part of the manufacturing sector.
• The Indian textile and apparel market is currently estimated at over $150 billion, of which, export constitutes over $40 billion.
  • A recent report pointed out that the global textile and apparel trade is set to reach $1,000 billion by 2025-26 and that in the same period the Indian textile and apparel market will reach $250 billion.
• The industry is a major income and employment generator.
  • India holds a 4% share of the U.S.$840 billion global textile and apparel market, and is in fifth position.
  • It contributes 2.3% to Indian Gross Domestic Product, 7% of Industrial Output, 12% to the export earnings of India and employs more than 21% of total employment.

Viscose : Future Fibre

• Viscose is a semi-synthetic material used in clothes, upholstery and other bedding materials.
• It’s derived from wood pulp, which is treated and spun into yarns to make fabric.
  • The soft, lustrous and lightweight viscose fabric drapes perfectly.
• It is a manufactured fibre made from natural materials.
  • It’s one of the three types of rayon: modal, lyocell, and viscose.
• It is widely used in upcoming subsectors in the textile industry, such as technical textiles and medical textiles.
  • Most importantly, viscose is a sustainable choice due to its biodegradable properties.
• Since viscose is made from a renewable resource, it’s biodegradable, making it environment-friendly.
  • However, its production process causes some negative environmental impacts.
    • Deforestation is a major environmental concern because wood cellulose is harvested by chopping trees.
    • Sometimes, harmful chemicals such as hydrogen sulphide are found in air emissions around viscose manufacturing sites.
    • The process of manufacturing viscose requires a lot of water, depleting one of our natural resources.
  • In terms of eco-friendliness, viscose fabric is better than synthetic fibres but not as good as all-natural fibres.
• As an alternative to silk and cotton, Viscose is ‘poor people’s silk’ because it is cheaper but with similar properties.

Viscose: New Hope to Weavers

• It is not just the ‘poor’ consumers but also the weavers of the fabric, who have found a new source of livelihood with the production of viscose.
• Due to a rise in the price of natural fibres such as cotton, many weavers shifted to producing viscose or blended viscose fabric.
• The Indian textile sector is still cotton dominated, which has limitations in supply.
  • Cotton acreage cannot be increased as food is a priority.
  • Hence, viscose blended cotton is being widely adopted as a viable alternative.
• Viscose has given new hopes to the Indian weavers.
  • Viscose fibre consumption is witnessing a steady rise, where the market grew from 542 KT (Thousand tons) in 2021 to 744 KT in 2022, a robust 37 per cent growth.
  • This was only possible as the Indian textile value chain could access Viscose fibre at internationally competitive prices.
• Currently, Viscose holds 16.5 per cent of the man-made fibre market in India.
• However, apart from helping weavers, it is also essential to ensure safeguards which are not protective but conducive in nature.
  • One issue plaguing the viscose value chain is the limited raw material supply of Viscose Staple Fibre (VSF).
    • India has a limited number of players involved in manufacturing VSF, with one major company contributing to over 90 per cent of the supply.
    • As a result, many weavers rely on imported fibre.

Concern: Anti-dumping Duty

• An upcoming development that can be detrimental to the weavers of viscose is the anti-dumping duty imposition on VSF imports.
• The imposition of this duty will make the procurement of the fibre much more challenging and all the more expensive for the weavers.
  • Anti-dumping duty on VSF was first introduced in 2010 and continued till 2021.
  • Re-introduction of anti-dumping duty will now impact many weaving hubs in Tamil Nadu, Maharashtra and Gujarat.
• This is an issue affecting production capacities and the lives of 4.5 crore people employed in the textile industry.
  • For example, with Tamil Nadu alone accounting for 75 per cent of India’s man-made cellulose yarn production, this duty can significantly hamper the State’s growth and endanger the livelihood of the 31 lakh rural textile workers in the State.
• The duty will also impact the entire value chain of the fabric, as the procurement of the fibre, which is the heart of the value chain, will be hit.

Way Forward:

• India needs to frame a suitable policy whereby the Indian textile industry can contribute to advancing our energy transition commitment.
• The answer to India’s growing market for viscose is not an anti-dumping duty.
  • Instead, we need emancipatory measures which ensure that weavers can procure required raw materials with equal levels of accessibility.
    • This can only be ensured if there is free competition in the market.
• There is a need to build a level-playing field in the sector so that pricing stays equal regardless of where a weaver buys their fibre from.

Conclusion:

• For India, It is high time that the country’s textile value chain is given the much-needed impetus.

Source: The Hindu BL

Mains Question:

Q. Discuss the significance of Viscose fibre to the Indian Textile Industry. Also, examine the possible effects of Anti-dumping duty on VSF (Viscose staple fibres). (250 Words).