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The southern spinning sector seeks Central and State governments’ urgent relief measures to sustain the jobs of one million workers and the livelihood of their families. The sector urged three southern States of Tamil Nadu, Telangana and Andhra Pradesh to roll back the power cost. It also urged Prime Minister Narendra Modi to extend a one-year moratorium for repayment of the principal loan amount.
SK Sundararaman, Chairman, Southern India Mills Association (SIMA) said that all the office bearers of the spinning mills associations in a meeting on Wednesday proposed a stoppage of production initially for a period of one week to sensitise the government and the urgent need for the relief measures. They have also advised the spinning sector across India to cut down production by 35 per cent or one shift to avoid distress sale and reduce the losses.
Other than SIMA, the participants in the meeting were from Tamil Nadu Spinning Mills Association; South India Spinners Association; Indian Spinning Mills Association; Recycle Textile Federation; Rajapalayam Spinners Forum; Andhra Pradesh Textile Mills Association and Telangana Spinning and Textile Mills Association, said Sundararaman.
Long-drawn recession
The Southern States, particularly Tamil Nadu, Andhra Pradesh and Telangana that account around 55 per cent of the spinning capacity in India, have been facing a long-drawn recession during the last 18 months due to numerous external factors particularly the global economic slowdown and sluggish demand in the domestic market.
The 11 per cent import duty levied on cotton and the expensive man-made fibre and filament yarns added fuel to the situation and drastically reduced the exports of yarns, fabrics, garments and made-ups. The cotton yarn exports from the country decreased by 56 per cent during 2023-24 (April to September 2023) compared with 1,304 million kg exported during FY21-22, he said.
The steep increase in the power cost ranging from ₹1 to ₹2.50 per unit has greatly affected not only the global competitiveness but also in the domestic market when compared with States like Maharashtra, Gujarat and Madhya Pradesh that offer huge incentives under their new State textile policies.
The spinning mills’ associations have appealed to the Prime Minister to extend a one-year moratorium for repayment of the principal loan amount; convert three-year loans under ECLGS into six-year term loans; extend necessary financial assistance to mitigate the stress on working capital, on a case-to-case basis and remove 11 per cent import duty on cotton.
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