MIP may be woven into textiles as imports rise

The government is examining if minimum import price (MIP) can be imposed on certain textile products which have seen a spike in imports in the last few months and injured the domestic industry.

The textiles ministry is studying at least six products including viscose rayon yarn, woven fabric of polyester and cotton shorts, most of which come from China.

“The government is studying if MIP can be applied on products facing a surge in imports. Domestic industry is being consulted to see where all India has capacity to meet the local demand,” said an official.

MIP is a temporary measure to provide protection to domestic industry from predatory pricing of cheaper imports and help in improving the domestic price. MIP prohibits imports if they are priced below the prescribed amount. Flax, laminated and coated fabrics of plastics and pile fabrics of manmade fibres (MMF) are also on the list of products being examined.

Flax imports have grown 78.7% on-year in April-August this year while those of viscose rayon yarn are up 10%. Inbound shipments of fabrics coated with polyurethane (PU) were up 28.8% in the period.As per industry analysis, a whopping 99% of the total import of $133.79 million worth of viscose rayon yarn came from China in the first five months of FY25, while 93% of the MMF pile fabrics was imported from there. New Delhi had a $40.81 billion trade deficit with Beijing in April-August 2024-25.”There are certain products with significant import dependence and which negatively impact the domestic industry. The government is checking for such disturbances so that appropriate action can be taken,” said a representative of the cotton textile industry.

China is also the top source of India’s coated fabrics of plastics and PU with a share of 68% and 52%, respectively, while Belgium and France are the key flax suppliers to India. Bangladesh is the top exporter of cotton shorts and trouser bib and brace overalls to India with an 81% share.

Last month, the government extended the MIP of $3.5 per kg on synthetic knitted fabrics till December 31 this year to discourage inbound shipments of cheap fabrics. The MIP was also extended for eight new kinds of knitted fabrics including printed, bleached, unbleached and crocheted fabrics.