The four reports focus on Nylon Filament Yarn (NFY), PET Resin, Viscose Staple Fibre (VSF), and Optical Fibre Cable (OFC), contending that while India has developed considerable domestic manufacturing capabilities via private investment and policy initiatives, ongoing supply-chain issues are hindering the country’s ability to fully capitalize on that foundation.
The findings reveal that dumped imports, limited access to crucial raw materials, dependency on upstream inputs, and inverted customs duty frameworks are stifling capacity utilization, deterring new investments, and increasing reliance on imports across these sectors.
The Nylon Filament Yarn report indicated that India has adequate installed capacity to satisfy domestic demand; however, dumped imports have led to the shutdown of ten domestic manufacturers. Capacity utilization is projected to decline to just over 45% by FY28. The report emphasized that China’s surplus NFY production is 15-17 times larger than the entire Indian market, with dumping margins reaching up to 55% for China and 150% for Vietnam. It suggested that implementing anti-dumping duties would result in only minor changes to downstream textile costs, increasing them by less than 0.7%.
The PET Resin analysis revealed a dramatic increase in imports from China, which escalated by 763% between FY22 and FY25, from 23,142 metric tonnes to nearly 200,000 metric tonnes. Additionally, it claimed that some Chinese exporters were evading existing trade measures through origin manipulation and routing via third countries. Given the extensive use of PET resin in beverages, food packaging, FMCG goods, and pharmaceuticals, the report cautioned that a continued decline in domestic manufacturing could heighten India’s vulnerability to external supply disruptions.
Within the textile sector, the VSF report pointed out that an inverted duty structure poses a significant challenge. Rayon-grade wood pulp, a key raw material, is subject to import duties, whereas finished viscose staple fibre from ASEAN countries enters India duty-free. As a result, domestic producers pay more for inputs than importers do for finished products. The report also highlighted an inverted GST structure, estimating that Indian manufacturers encounter a 7-8% cost disadvantage compared to global rivals due to extra taxes and levies.
The Optical Fibre Cable report mentioned that India has developed substantial manufacturing capabilities, with a production capacity of around 100 million fibre-km encompassing preform production, fibre drawing, and cable assembly. However, the country remains reliant on imports for critical upstream materials such as Germanium Tetrachloride, Silicon Tetrachloride, helium, and UV resins. The report underscored the importance of securing these essential inputs for supporting BharatNet, 5G deployment, AI data centres, cloud infrastructures, and defence communications.
Across all four industries, the reports advocate for increased utilization of WTO-compliant trade measures like anti-dumping duties where applicable, stricter enforcement of Quality Control Orders, rectification of inverted customs duty and GST frameworks, diversification of sourcing for critical upstream materials, and enhanced connections between public procurement and domestic value addition.
The Industrial Supply Chain Resilience Series seeks to bolster policy dialogues surrounding India’s manufacturing vulnerabilities and identify strategies to diminish import dependence while enhancing the country’s competitiveness as a global manufacturing hub.
