Texpreneurs Forum is in the process of appointing an external agency to conduct a study of the textile industry, particularly of the financial stress faced by the mill sector in the last 2 – 3 years.

D Prabhu, Secretary, Texpreneurs Forum, told Business Line that the findings of the proposed study would be submitted to the Finance Ministry. “This is consequent to our meeting with the powers that be at the Centre and the recommendations made by the Textile Ministry to the Department of Financial Services under the Union Finance Ministry for lowering the interest on working capital loan for purchase of cotton.”

The Forum also expressed the felt need for a time bound interest subvention mechanism for procurement of cotton.

“The industry has, since 2011 been put to hardship due to unprecedented fluctuation in cotton prices and consequent erosion in working capital, high interest cost and reduction in demand due to change in China’s inventory policy among others. Some handholding and governmental interventions would help re-ignite the investment sentiments and propel the growth momentum to a different level,” says Prabhu.

The Forum has, in its pre-budget memorandum stressed the need for rationalisation of duty structure – both central excise and customs – of polyester and viscose fibre to enable the Indian manufacturers access the rapidly growing global MMF (Man Made Fibre) apparel market.

“The excise duty should be slashed to 4 – 5 per cent from the present 13 per cent and the import duty from a high of 28 per cent to around 2 -3 per cent. The contention that the cotton economy would be impacted if the MMF duty structure is rationalised will not hold good as there is huge demand for blended apparels, where the share of cotton is still around 65 – 70 per cent. Because we are not competitive in the 30- 35 per cent MMF fibre, clusters like Tirupur are losing out to competing countries,” the Texpreneur Secretary explained.

Emphasising the need for quick redressal of issues concerning implementation of the TUF (Technology Upgradation Fund) Scheme, Prabhu noted that suitable enhancement in budget allocation to cover the backlog and early disbursement of TUF subsidy would give the industry some respite as it is now facing huge working capital stress.

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