India removes VSF barriers, opening the door to cheaper imports and stronger exports

In a decisive move expected to re-energize India's vast textile value chain, the Ministry of Textiles has rescinded the Quality Control Order (QCO) for Viscose Staple Fibres (VSF) with immediate effect. This notification, published in The Gazette of India on November 18, 2025, reverses the earlier order that had placed mandatory Bureau of Indian Standards (BIS) certification on VSF imports. The official order stated that the government, in exercise of its powers and after consultation with the Bureau of Indian Standards, "hereby rescinds the notification of the Government of India in the Ministry of Textiles No. S.O. 6143(E) dated $29^{th}$ December, 2022... relating to Viscose Staple Fibres with immediate effect".

This policy shift, which follows the recent rollback of QCOs on the polyester value chain, directly addresses the persistent concerns of the textile industry regarding supply constraints and high raw material costs. The move is timed to support the ambitious Vision 2030 goal of achieving $100 billion in textile exports.

Impact on domestic polyester fibre & yarn market

The removal of the QCO on Viscose Staple Fibre (VSF), the second-largest Man-Made Fibre (MMF) after polyester is set to fundamentally alter the competitive dynamics within India's entire MMF basket, including the dominant Polyester segment.

Pricing and cost competitiveness: Prior to the rescission, the QCO on VSF acted as a non-tariff barrier, granting a significant price advantage to the sole domestic producer and restricting imports.

• VSF price srop: Domestic VSF was priced at an estimated 10 to 12 per cent premium over imported material from countries like China and Indonesia. The immediate re-opening of the market will lead to the inflow of cheaper international VSF, forcing a convergence of domestic prices with globally competitive rates.
• Pressure on polyester: As VSF becomes more affordable, it increases the competitive pressure on Polyester Staple Fibre (PSF). The overall reduction in MMF raw material costs will improve the global cost competitiveness of Indian textile products, including those based on polyester and poly-viscose blends, which is vital for the export market.

Demand, blending, and supply

The global textile market is heavily dominated by MMF, accounting for roughly 75 per cent of total fibre consumption. Polyester and VSF are crucial components, often used in blends to meet consumer demand for comfort and durability.

• Boost to blends: VSF is widely used in apparel, knitted wear, and home textiles, often blended with cotton or polyester. Lower VSF costs will make Poly-Viscose (P-V) blends more attractive and cost-effective for spinners and garment manufacturers.
• Uninterrupted supply chain: The QCO had caused supply chain disruptions and compelled spinners to procure VSF from a single domestic monopoly source at higher prices. The rescission ensures a seamless and uninterrupted supply of raw materials for the entire MMF value chain.

Impact on imports

The QCO on VSF, which became effective in April 2023, was highly restrictive. The import data for Viscose Staple Fibre (HSN 5504) reflects the impact of the QCO.

Table: Import and supply chain impact of the QCO

The drastic 65 per cent drop in VSF imports following the QCO's enforcement in April 2023 highlights the severity of the supply chain disruption and the domestic price premium it fostered.

The re-opening of the market will facilitate wider access to foreign suppliers, which is crucial for the Indian textile industry to compete effectively with major MMF apparel exporting nations like Bangladesh and Vietnam, which historically have had access to cheaper inputs. This exemption is expected to provide substantial relief to exporters who had previously received only limited exemption for VSF imports under the Advance Authorisation Scheme.

Industry lauds move

Industry leaders have widely welcomed the decision, viewing it as a critical move for the sector's long-term growth. "The removal of the QCO on VSF is expected to ensure seamless access to quality raw material, enhance global competitiveness, and drive industry-led growth to support these national objectives," said a statement from the Ministry of Textiles. This move is seen as a major step toward achieving the government's target of boosting the textile business size from $160 billion to $350 billion, including $100 billion in exports.

Indeed, the removal of the VSF QCO is not merely regulatory housekeeping, it is a strategic reset of India’s fibre policy. It corrects distortions, boosts competitiveness, and restores confidence across the manufacturing chain; for spinners, it provides stability; for garment makers, it improves margins; for exporters, it delivers pricing power; for policymakers, it reinforces the narrative of India as an open, globally aligned textile powerhouse. And for the broader Vision 2030 mandate, it is one more stitch in the fabric of India’s long-term rise as a global MMF leader.