The production strike by the spinning mills, including MSMEs and Open End, in Tamil Nadu (mostly located in Coimbatore) will be withdrawn from Saturday. This follows a meeting by members of various industry associations with the State Electricity and Finance Minister Thangam Thennarasu on Friday. MSME Minister TM Anbarasan and Handloom minister R Gandhi were also present in the two-hour long meeting.

The spinning mills in the major production centre of Coimbatore is in the midst of a crisis. The members of Open-End Spinning Mills Association (Open-end spinning is a technology for creating yarn without using a spindle) resorted to a production strike from July 10 while the MSME mills in the textile city stopped production and sale of yarn from July 15 due to heavy losses incurred by them.

The minister after hearing all the problems faced by the spinning mill workers said he would discuss with Chief Minister MK Stalin and announce a favourable decision. “Based on the confidence given by the minister, we are withdrawing our production stoppage of Open End mills from tomorrow,” said G Arulmozhi, President, Open-End Spinning Mills Association, a participant in the meeting.

K Venkatachalam, Chief Advisor, Tamil Nadu Spinning Mills Association, said the minister assured that he would discuss with the CM all the issues and will do whatever is possible. Accordingly, he requested to end the strike immediately.

The other associations that participated in the meeting were South India Spinners Association; Indian Spinning Mill Owners Association, Recycle Textile Federation and South India Mills Association, Tamil Nadu Spinning Mills Association and Indian Taxpreneurs Federation (ITF).

Associations’ demands

The associations’ joint memorandum urged the State government to make a strong representation to the Centre to immediately withdraw the eleven per cent import duty imposed on cotton when imported. This is considering the non-availability of raw cotton, and to provide a level playing field in cotton availability to spinning mills in Tamil Nadu.

The associations also urged the State government to make a strong representation to the Centre to reduce the interest rates of the banks to the previous level of 7.5 per cent per annum, considering the fact that the textile Industry is the largest provider of employment next to agriculture, on a priority interest rate basis.

“We request the State government to make a strong representation to the Centre to direct the RBI to make the outstanding Short-Term Loan of ‘Emergency Credit Line Guarantee Scheme, which was provided during the Covid-19 period, restructured and provide fresh ECLGS loan.

The associations urged the State government to immediately withdraw the electricity tariff hike announced on July 9, 2022.

Prabhu Dhamodharan, Convenor, ITF, said the federation suggested the government to appoint an external expert financial research agency to study the stress level in the sector with focus on covering multiple sub segments of textile and apparel sector, which will submit the report to the Union Finance ministry with data. This study report should cover the present and immediate future demand in domestic and export sectors.

State govt can conceptualise a new scheme with incentives to uplift the technology levels of TN spinning sector to face the emerging competition. This scheme can build permanent competitiveness for the sector in TN , he said.

The spinning sector, with 1,500 spinning mills and around 15,00,000 employees, is one of the vital engines of the industrial economy of Tamil Nadu. The combination of high cotton prices, increased operational costs, including bank interest rates and poor demand in domestic and international markets, and the increase in electricity charges has plunged the sector into such a severe crisis due to which, the spinning mill association declared a production stoppage from July 15.