SIMA calls for comprehensive textile policy

Cotton industry in Tamil Nadu has emphasised the need for a comprehensive State-specific textile policy.

The Southern India Mills Association (SIMA) Chairman, T Rajkumar, said, “the need is more so because the requirement of the white fibre is huge in Tamil Nadu as compared to cotton production.”

“The mills located here source cotton from upcountry markets as the requirement is close to 130 lakh bales against the production of mere 5 lakh bales.

“Steep increase in transportation cost coupled with the 5 per cent VAT on cotton cone yarn has made the domestic sector uncompetitive,” the SIMA chief said.

He pointed out that despite such disadvantages, the textile industry in the State accounted for a-third of the textile manufacturing facility, 47 per cent spinning capacity, 60 per cent yarn exports, 20 per cent powerloom capacity, 70 per cent cotton fabric knitting capacity and over ₹60000 crore as forex earnings annually.

Briefing reporters, Rajkumar said SIMA has been working closely with the State government for over six months now as a lead organisation to draft the textile policy for the entire textile value chain from fibre to finished goods.

“We have already submitted our proposal and held several rounds of discussions with the powers-that-be.

“Only a comprehensive textile policy would help sustain the viability of the huge manufacturing facilities, attract investments for modernisation and value-addition and make the state the hub for textile manufacturing in the global map.”

Highlighting the major suggestions put forth by the association for sustaining the viability of the existing spinning sector, he reiterated that VAT on cone yarn should be brought down to 2 per cent.

“Maharashtra had reduced the VAT to 2 per cent long back and West Bengal, a major hosiery manufacturing state, had exempted hosiery yarn from VAT.”

“Further, states that have announced new textile policies have extended VAT exemption, capital subsidy of ₹1 to 1.50 per unit of power apart from numerous other benefits, enabling a cost advantage of ₹25 per kg of yarn for the spinning mills located in the respective states.”

The association has also suggested the need for removal of one per cent Market Committee Cess on cotton and cotton waste, evacuation of wind energy, 5 per cent interest subvention for cotton purchase till the state achieves self-sufficiency in cotton production, a separate power tariff for the textile industry based on load factor and extension of various other incentives to boost investments in the State.

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