Cheap viscose yarn is being dumped into India. The going had been good for spinning mills as demand for manmade fibers, especially viscose fiber, had been grown for the past four or five years, both in the domestic and international market. But over the past nine months, the picture has changed dramatically. With low import duties for viscose yarn, global producers have started dumping it in India, hindering the business of domestic spinning mills. These mills are bleeding as they have to sell their viscose yarn at cheap prices. The global economic slowdown and trade disputes between the US and China have resulted in excess stocks of viscose products in the market and a sharp drop in prices.
The duty differential between the fiber, yarn and fabric of viscose is what is causing the dumping of yarn by other countries in India. While the import duty on viscose fabric is 20 per cent and that on viscose fiber is 18 per cent, duty on viscose yarn is only five per cent. Coupled with the cheap price of viscose yarn in the global market, the low import duty has prompted Indian weavers to prefer it over the yarn from domestic spinners and buy it from traders who import it in bulk from China or Indonesia.