Companies which imply tartan products made in India are the product of Scotland could face tougher sanctions.
Scottish companies have raised concerns about unfair practice
The Department of Trade has agreed to conduct an investigation into concerns raised by Scottish tartan manufacturers about unfair trading practices.
The Scottish Tartans Authority said some websites were passing off kilts from India as "made in Scotland".
Trade Minister Ian Pearson promised to review regulations to ensure officials had the power to stamp out any abuses.
Borders Liberal Democrat MP Michael Moore raised the issue in the House of Commons, after being approached by the chairman of the trade body.
Mr Moore welcomed the minister's stance and said he would be seeking a meeting with him to pursue the matter.
"This is a serious issue for Scottish manufacturers," he said.
"They all accept the need to compete on a worldwide basis but trade has to be fair.
"It must be clear to tourists and others where kilts or other products have been made.
"Particularly for a product like tartan, people need to have confidence that they are buying genuine Scottish made goods."