The four reports, covering Nylon Filament Yarn (NFY), PET Resin, Viscose Staple Fibre (VSF) and Optical Fibre Cable (OFC), argue that while India has built substantial domestic manufacturing capacity through private investment and policy support, persistent supply-chain vulnerabilities are preventing the country from fully leveraging that base.
According to the reports, dumped imports, restricted access to key raw materials, dependence on upstream inputs and inverted customs duty structures are depressing capacity utilisation, discouraging fresh investment and increasing import dependence across these industries.
The report on Nylon Filament Yarn said India has sufficient installed capacity to meet domestic demand, but dumped imports have already forced ten domestic manufacturers to shut down. Capacity utilisation is projected to fall to just over 45% by FY28. It noted that China’s surplus NFY production is 15-17 times the size of India’s entire market, while dumping margins have been identified at up to 55% for China and 150% for Vietnam. The report argued that anti-dumping duties would have only a marginal impact on downstream textile costs, raising them by less than 0.7%.
The PET Resin study highlighted a sharp rise in imports from China, which surged 763% between FY22 and FY25, from 23,142 metric tonnes to nearly 2 lakh metric tonnes. It also alleged that some Chinese exporters were circumventing existing trade remedies through origin manipulation and third-country routing. Given PET resin’s widespread use in beverage bottles, food packaging, FMCG products and pharmaceuticals, the report warned that continued erosion of domestic manufacturing could increase India’s exposure to external supply shocks.
For the textile sector, the VSF report identified an inverted duty structure as a major bottleneck. Rayon-grade wood pulp, the industry’s primary raw material, attracts import duty, while finished viscose staple fibre from ASEAN countries enters India duty-free. Domestic manufacturers therefore pay more for inputs than importers pay for finished products. The report also pointed to an inverted GST structure and estimated that Indian manufacturers face a 7-8% cost disadvantage compared with global competitors because of additional taxes and levies.
The Optical Fibre Cable report said India has built significant manufacturing capabilities, with production capacity of around 100 million fibre-km spanning preform production, fibre drawing and cable assembly. However, the country remains dependent on imports for strategic upstream materials such as Germanium Tetrachloride, Silicon Tetrachloride, helium and UV resins. The report described securing these critical inputs as essential for supporting BharatNet, 5G rollout, AI data centres, cloud infrastructure and defence communications.
Across all four sectors, the reports recommend greater use of WTO-compliant trade remedies such as anti-dumping duties where dumping has been established, stricter enforcement of Quality Control Orders, correction of inverted customs duty and GST structures, diversification of sourcing for critical upstream materials and stronger links between public procurement and domestic value addition.
The Industrial Supply Chain Resilience Series aims to strengthen policy discussions around India’s manufacturing vulnerabilities and identify measures to reduce import dependence while improving the country’s competitiveness as a global manufacturing destination.
