Textile mills may stop work for a day

Spinning mills across the country are proposing production stoppage for a day to draw the attention of the government to the industry’s plight and stress the need for right policy initiatives.

Neglected sector In a hurriedly convened meeting of its executive committee here last week, the Southern India Mills Association (SIMA) decided to take this extreme step, as the members perceived that the sector is being neglected by the government.

Recalling the association’s earlier call for production halt in 2008, K Selvaraju, Secretary General, SIMA, said “we took the lead then to impress upon the then government the need for withdrawal of 14 per cent import duty on cotton. A similar attempt is being made now to highlight the present plight of the sector.”

A day’s production halt is expected cost the industry roughly ₹6,000 crore, notwithstanding the loss to the exchequer.

The mills are also contemplating a production cut of 15 to 20 per cent in the short run, in consultation with the spinning mills located in other parts of the country

Struggling to survive Lamenting the stepmotherly treatment meted out to the textile sector, T Rajkumar, Chairman, SIMA, said the sector has huge potential for exports, but due to lack of support from the Centre, the industry is struggling to sustain and survive. “If the government holds a deaf ear even now, a good number of units will be forced to down shutters, rendering thousands jobless,” he said.

The Association has sought government’s attention to allocate ₹6,500 crore to clear all pending TUF subsidies, extend Merchant Export Incentivisation Scheme till the FTAs are signed, implement GST and announce a National Textile Policy without further delay.

“The industry has been facing yet another long-drawn recession for the last 15 months. Spinning and powerloom sectors are the worst affected. Though various State governments have announced attractive textile policies, these have become a major threat for the existing capacities to compete with new capacities being created.

“In the absence of a level playing field (due to higher rates of duties for Indian textile products in international markets), higher raw material cost, high cost of funding and transaction cost, the industry will not be in a position to achieve its potential growth rate.

Global recession “Policy initiatives at this juncture is crucial to strengthen the competitiveness of the Indian textile industry,” the SIMA chief said. He pointed out that global recession had pushed the Indian textile industry to the corner and the country had become the least preferred nation in textile trade due to higher rates of duties.

Rajkumar further said that the synthetic textile manufacturers were also in a bad shape as huge volumes of yarns and fabrics were imported from countries like China, Indonesia and Thailand.

“High levies of over 20 per cent on synthetic fibres apart from the anti-dumping duty did not allow the Indian synthetic industry to grow,” he said and appealed for immediate withdrawal of the anti-dumping duties and reduction of central excise duty from 12.5 per cent to 6 per cent.

The industry will be able to sustain and not require any incentive if a level playing field is created on tariff rates, raw material cost, cost of funding and transaction cost, Rajkumar said.

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