Disclosing this, industry sources point out that the matter is being discussed with the union ministry of textiles.

One of the suggestions mooted is that the ruling domestic prices for these products in the US are much higher than those prevailing in the Asean countries, including India.

Therefore, if a specific rate of duty is fixed, say at Rs 18-20 per kg for a period of two-three years, that may not only meet the bilateral commitment to bring down the import tariff to 20 per cent, but may also facilitate a fair domestic competition. The industry seems to be considerably concerned over this matter.

The industry is also of the view that the duty differential of just 7.5 per cent between the raw materials (PTA/MEG) andfinished products (PSF) should at least be doubled. In this context they point out that the budget has proposed import duty of 20 per cent plus 10 per cent surcharge on PTA/MEG, while on PSF it has proposed 35 per cent plus surcharge. Thus, the duty differential in this case comes to a meagre 7.5 per cent.

Even the intermediate product, PET chips, enjoy higher protection with import duty of 35 per cent plus 10 per cent surcharge. The raw material, PTA also enjoys a higher duty differential protection. The industry has, therefore, represented to the government that the duty differential between PSF and PTA should be at least 15 per cent.

The industry says that the excise duty of 24 per cent on fibre and yarn wastes is quite excessive and abnormal and should be brought down to 8 per cent. In this context it has argued that factories generating plastic scrap and fibre/yarn wastes are scattered all over the country.

Collection of such materials is done by the traders who do the lifting, sorting, packing andtransportation. It is not possible to avail of Modvat credit for such purchases due to problems of lot-identity, documents etc. Besides, there is zero excise duty on recycled polymers.

An anomalous situation has arisen at present. While excise duty on virgin plastics/fibres has been fixed at 16 per cent, that on wastes of plastics and fibres/yarns has been fixed at 24 per cent. Such high excise levy on plastic/fibre wastes makes the cost of such materials highly prohibitive, particularly in view of problems involved in availing of Modvat credit. The industry has, therefore, demanded that the excise duty on plastic wastes and polyester wastes be brought down to 8 per cent to meet the ends of justice.

Meanwhile, Indian polyester fibre producers have been driven out of the international markets for the last three months. In March 1998, Indian exports of PSF had reached a peak of 2066.74 tonnes. Subsequently, they started shrinking and came down to zero in December 1998. There have been no exports of PSF inthe first two months of 1999. Competition in the overseas markets is so intense that it may be extremely difficult for Indian PSF producers to re-enter export markets, unless the overseas prices improve reasonably from the present unremunerative levels.

Indian manufacturers of polyester filament yarn (PFY) are also rapidly losing ground in the overseas markets.

In March 1998, exports of PFY from the country amounted to 8802.31 tonnes.

It gradually fell from that level since then and stood at just 1864.47 tonnes in February 1999. Chances of these exports going up are dim as foreign suppliers are quoting very low prices.