India may enforce QCO on viscose from March 29; disruption imminent?

The ministry of textiles (MoT) had issued the viscose QCO 2022 notification on December 29 last year with a one-month implementation deadline. However, the government granted extensions to allow the industry to prepare for compliance. Industry experts believe that the extension will help Indian manufacturers fulfil their prior supply commitments. Industry bodies had urged the government for the extension, citing India's import dependency on VSF, to give the industry more time to comply with the QCO procedures and ensure that already-shipped VSF orders are not affected. 

Regarding domestic supply, market sources claim that Grasim Industries Limited, the leading producer of the fibre, is prepared to implement the order from March 29, 2023. The company has received certification for its domestic plants, although it has yet to obtain certification for plants in other countries. Currently, it imports nonwoven viscose staple fibre from its overseas plant. However, it plans to set up new plants in India to produce nonwoven VSF to meet domestic demand. In terms of the possible price increase after the QCO implementation, industry experts say that there is no likelihood of a drastic increase in the cost of production, which should not lead to price hikes. 

However, industry experts warn of potential disruptions in the supply of vegetable-based fibre, which could lead to price hikes. “The market still feels that the government will extend the implementation date. No foreign producer has received the certification yet,” an importer and trader from Mumbai, Mahesh Sharma, told Fibre2Fashion. Therefore, imported supplies may be disrupted. Sharma said that Indian textile raw material should not be monopolised and that more suppliers will help the industry develop. 

Market sources argue that global companies supplying viscose will also need to comply with the QCO, which involves a lengthy procedure that could delay the import of the material. It was initially thought that the QCO would restrict cheaper viscose fibre. However, market sources said that it will ensure quality standards without being detrimental to imports. While not all imported supplies are of low quality, it is more economical to balance the market prices of viscose. 

Fibre2Fashion News Desk (KUL)