Government looks at introducing MIP to curb growing textile imports

The Indian government is evaluating the imposition of a minimum import price (MIP) on select textile products to protect the domestic industry from increasing imports, primarily from China. The textiles ministry is reviewing six items, including viscose rayon yarn, polyester-cotton woven fabric, and cotton shorts.

MIP serves as a safeguard against predatory pricing by setting a minimum threshold for imports. Products under scrutiny also include: flax, laminated fabrics, and pile fabrics of manmade fibers (MMF). During April-August FY25, flax imports grew by 78.7 per cent year-on-year, viscose rayon yarn by 10 per cent, and coated polyurethane (PU) fabrics by 28.8 per cent. Experts say, China accounting for 99 per cent of viscose rayon yarn and 93 per cent MMF pile fabric imports, leads to $40.81 billion trade deficit with Beijing during the period. Bangladesh leads cotton shorts and trouser imports with an 81 per cent share.

MIP can shield domestic players where India has sufficient capacity to meet local demand. To curb cheap imports, the government recently extended the MIP of $3.5 per kg on synthetic knitted fabrics until December 31, adding eight more categories like printed and crocheted fabrics. This review aims to mitigate the adverse impact on India's textile sector while ensuring fair competition.