QCO Rollback On Polyester Fibre, Yarn: Exporters Welcome Move, Hopeful Of Trade On An Equal Footing

“We will now get raw materials at competitive rates; so, our finished products will also be competitive in exports and, most importantly, in the domestic market,” said Harsh Banthia, director of Surat-based Citizen Umbrella Manufacturers Limited. 

Ashish Gujarati, president of Pandesara Weavers' Cooperative Society and former president of Southern Gujarat Chamber of Commerce and Industry (SGCCI), explained that the restrictions, which were put in place in October 2023, were intended to boost manufacturing and the use of locally produced raw materials. Until then, close to 75% raw materials used were sourced from within the country, while the remaining 25% raw materials were imported, mostly from China (an estimated share of 90% of the total imports).

An Array Of Products

These products mainly include terephthalic acid, ethylene glycol, 100% polyester spun, grey and white yarn, polyester industrial yarn (IDY), polyester staple fibres, polyester continuous-filament fully drawn yarn, polyester partially oriented yarn, polythene material for moulding and extrusion, acrylonitrile butadiene styrene (ABS), polypropylene materials for moulding and extrusion, polyvinyl chloride homopolymers, ethylene vinyl acetate (EVA) copolymers, polyurethanes, and polycarbonates. 

These are used to manufacture synthetic fabrics, umbrellas, backpacks, raincoats, garments, jackets, and a host of products in the technical textile segment. 

Shortage Of Materials, Prices Go Up

However, after the restrictions came into effect two years ago, the domestic market witnessed a significant shortage of raw materials, driving up prices in the Indian market, Banthia told The Secretariat.

As a result, the cost of finished products from India shot up, both in the local and export markets. “Often, the local raw materials were of poor quality, as compared to the imported raw materials,” remarked Banthia, who also highlighted the importance of import substitution. 

A Fillip To The Synthetic Textile Sector

With a share of 45,000 units, Surat has a roughly 50% share in the total production in the country. “Certain types of speciality yarns are not produced in India; so, we could not manufacture many finished products as per the demand in the Indian and export markets,” remarked Gujarati, adding that the removal of restrictions will give a major boost to the synthetic textile sector in India. This can also significantly boost production, creating 25% new job opportunities in Surat in the next five years, Gujarati further points out.  

Welcoming the decision, Confederation of Indian Textile Industry (CITI) Chairman Ashwin Chandran said, “The rescinding of the QCOs on polyester fibre and polyester yarn comes as a great relief, as it has been a long-standing demand of all the user industries."

Man-Made Fibre (MMF) Products

Polyester fibre and polyester yarn form most of the man-made fibre (MMF) products. Therefore, this measure will definitely contribute to the growth of the MMF segment in India. The removal of the QCOs will boost the cost competitiveness of Indian textile and apparel products, as the procurement of raw materials at internationally competitive prices will become easier.

Along with the export package announced on November 12, the rescinding of the QCOs will act as a major confidence-booster for the textile and apparel sector.

According to industry sources, synthetic textiles is one of the most promising segments in the Indian textile industry. It is slated to grow at a CAGR of about 7% from 2023 to 2030. The key factors driving the segment are changes in lifestyle, urbanisation, and the growing need for functional and performance textiles. 

According to private sources in the industry, India’s MMF textile exports amounted to 5.74 US$billion in 2024. Polyester Filament Yarn (PFY) topped the list of all MMF exports, accounting for 46% of the total market.

India's top export destinations are the US, the UAE, Turkey, Bangladesh, Brazil, Sri Lanka, Egypt, Germany, Italy, and Belgium. For overall textile and apparel exports, the US is the single-largest market, with a 28% share. The MMF segment dominates the textile and apparel sector globally. In India, though, cotton remains the leading raw material.