While Reliance, Indo Rama and Sanghi Polyesters are expected to be the key beneficiaries of this move, the proposed duty cut is expected to result in a loss of earnings of roughly Rs 450 crore to Rs 500 crore by way of customs duties. Though no official confirmation on the proposed duty cut was available, a host of players like IPCL and Bombay Dyeing are, however, said to be against the proposed duty reduction.

The proposed duty reduction comes at a time when the government has just about commenced the budget exercise and indications are that a notification is expected soon.

Reliance, in its annual report, says that its production of polyester intermediates (PX, PTA and MEG) during the 1999-2000, was up 45 per cent at 2.18 million tonne, well above the industry growth rate of 40 per cent. The company is the sixth largest PTA producer in the world and was the only producer of paraxylene and PTA in India during 1999-2000. Polyester prices have, however, increased by 20 per cent over the past few months.

Meanwhile, the designated authority, set up by the commerce ministry, had earlier imposed provisional anti-dumping duties amounting to Rs 521 per tonne on PTA imports from Spain on the grounds of injury to the domestic manufacturer.

The duties were imposed after an investigation, which revealed that Spain had been exporting PTA much below the normal value. However, the authority did not clamp a duty on imports from Japan, Malaysia and Taiwan which also came under the purview of the dumping probe. The government had earlier imposed final anti-dumping duties on PTA from South Korea, Thailand and Indonesia. The latest position on this could not, however, be determined.