Cheap Chinese Spun Yarn Crippling Domestic Industry in Tamil Nadu

23-Apr-2025 08:50 PM

Pallipalayam. The textile town of Pallipalayam, near Erode in Tamil Nadu, is facing a serious challenge due to the influx of cheap Chinese viscose spun yarn (VSY), a ripple effect of the ongoing US-China trade war.

Known as a major hub for VSY production in India, the region is now witnessing growing distress among its over 60 spinning mills, which solely manufacture this crucial yarn used in knitted and woven fabrics.

With high tariffs imposed by the US on Chinese textiles, China has begun diverting its exports to India at significantly reduced prices, leading to market dumping that threatens domestic producers.

Textile manufacturers in the region report that Chinese VSY is flooding Indian ports like Kandla and Mundra, creating massive stockpiles and intensifying pressure on local production.

Industry experts highlight that Pallipalayam consumes nearly 90% of India’s daily viscose staple fiber (VSF) production, with about 2000 out of 2200 tons being used in this region alone to produce VSY.

The sudden surge in cheap imports is not only disrupting this local supply chain but also jeopardizing the sustainability of domestic units, raising calls for urgent policy intervention to protect indigenous manufacturers from unfair trade practices.