The Indian government is actively considering imposing a Minimum Import Price (MIP) on certain textile products to safeguard the domestic industry from a surge in imports, particularly from China. The move comes as the textile ministry is examining at least six product categories, including viscose rayon yarn, woven fabric of polyester and cotton shorts, to determine if MIP can be implemented.
The MIP, a temporary measure, is designed to protect domestic producers from predatory pricing by foreign exporters. It sets a minimum price below which imports are prohibited. By imposing an MIP, the government aims to create a level playing field for domestic manufacturers and encourage local production.
Products Under Scrutiny:
The six product categories currently under the government’s radar are:
- Viscose Rayon Yarn: Imports of this yarn, primarily from China, have surged by 10% year-on-year in the April-August period of the current fiscal year.
- Woven Fabric of Polyester and Cotton Shorts: China is a major supplier of these products to India.
- Flax: Imports of flax have witnessed a significant 78.7% year-on-year growth.
- Laminated and Coated Fabrics of Plastics: A substantial portion of these imports originates from China.
- Pile Fabrics of Manmade Fibres (MMF): China dominates the supply of MMF pile fabrics to India, accounting for 93% of the total imports.
- Fabrics Coated with Polyurethane (PU): Imports of PU-coated fabrics have increased by 28.8% year-on-year.
Industry Concerns and Government Response:
The Indian textile industry has expressed concerns over the rising imports, particularly from China, which have negatively impacted domestic production and employment. The government is actively engaging with industry stakeholders to assess the impact of imports and identify potential solutions.
By imposing an MIP on these products, the government aims to:
- Protect domestic industry: Shield domestic manufacturers from unfair competition and predatory pricing.
- Promote local production: Encourage domestic production and create jobs in the textile sector.
- Reduce trade deficit: Decrease India’s trade deficit with China, which has been a persistent issue.
The government’s decision to extend the MIP on synthetic knitted fabrics until December 31, 2024, underscores its commitment to safeguarding the domestic textile industry. This move is expected to provide much-needed relief to domestic manufacturers and boost domestic production.
As the government continues to evaluate the situation and consider further measures, the Indian textile industry remains hopeful that these steps will help revive domestic production and strengthen the sector’s competitiveness.
