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Government urges to start textile production after witnessing a 28% fall in Tamil Nadu

BTJ Desk Report
Government urges to start textile production after witnessing a 28% fall in Tamil Nadu

Tamil Nadu’s Micro Small and Medium Scale Enterprises (MSME) sector spinning mills had halted production to protest crippling daily losses of more than 100,000 rupees or approximately $1,218, reported recently from sourcing journal.

After the yarn producing factories bringing their production at half pace for seven days, spinners in Tamil Nadu were urged keenly to start their production in full fledge.

Tamil Nadu, India’s 10th largest state and 6th most populous is the home to more than 2000 mills. The state is considered to be the knitwear specialist, the city ‘Tirupur’ earned its fame by having producing 75% of knitted garments, 25% weaving and 45% of made-up textiles. The sector is directly involving about 6 million people, generating 750 billion rupees which is around 9.14 billion USD.

The state halted its production of textiles due to a daily loses of 100,000 rupees. Spinning mills want the government to drop an 11% import duty on cotton, which has resulted in 15% higher prices for domestic cotton. These export losses putting India at a disadvantage compared to neighboring countries. In March, the country saw fall of export of cotton yarn by 50% and cotton textiles down 23%.

“The textile Industry in Tamil Nadu has been facing unprecedented losses for the past several months. For the first time, in the last 20 years, exports of yarn and textiles have declined by around 28%. There is a great fear among the spinning mill entrepreneurs that the industry will face a situation, where it would not be able to operate the mills in future on the reason of continuous financial unviability,” they wrote.

“As the mills are forced to incur huge and heavy losses, they are unable to meet the administrative expenses like bank loan repayment (principal and interest), cotton purchase payments, electricity bills, goods and service tax and other payments,” they continued. “Therefore, the mills are at a very critical situation during these months and they are almost placed at a standstill situation. If this situation continues, even for a month, the spinning mills will soon become non-performing assets and the mills will be at risk of permanent closure.”

Textile and apparel exports from India fell 15.26% to $8.4 billion in the April-June quarter this year, from last year’s comparable $9.9 billion. Exports are down 13.23% for textile and down 17.72% for apparel during the period.


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