New Delhi, Oct. 8 -- In a first, the government is vetting a proposal to levy a minimum export price (MEP) on cotton yarn to ensure local availability and protect domestic textile manufacturers from a sharp rise in raw-material costs, two people aware of the matter said.

The move comes against the backdrop of a surge in cotton yarn prices following US restrictions on cotton originating from China's Xinjiang region, where Washington alleges that Uyghurs and other ethnic minorities are subjected to forced labour.

Cotton yarn prices have surged around 60%, from about Rs.250 per kg in early 2026 to nearly Rs.400 per kg now, putting pressure on textile manufacturers, particularly those that use yarn to produce fabrics and garments, according...