COIMBATORE: With cotton prices remaining high and yarn prices not moving up, textile mills in the State are still in the crisis, according to the Southern India Mills’ Association (SIMA) and the South India Small Spinners’ Association (SISSPA).
In a release, SIMA chairman K.V. Srinivasan said cotton prices were 20 per cent higher than in January last year, and yarn prices were 10 per cent lower than in the corresponding period last year. “Textile mills will normally procure their entire cotton requirement during November–January. But during this season, the mills are not in a position to buy cotton owing to high prices and lower realisation of yarn prices.” The textile spinning sector had been reeling under recession since the beginning of 2007 owing to the appreciation of the rupee against the dollar and high interest rates.
Countries such as China and Pakistan did not face such problems, so they increased their share in the global trade. Meanwhile, India’s growth declined from 12 per cent to five per cent in the last one year. Further, the mills in Tamil Nadu were plagued by long hours of power shutdown in the last few months. Hence, a number of mills were incurring losses.
The measures the Centre had taken in the last three years to make the textile industry globally competitive were nullified by the current crisis, he said.
SISSPA chairman R. Kuppusamy said the recession had prevented the mills from repaying the bank credit, and several units might close down if the situation continued. The two associations urged the Central and State Governments to bail out the mills. The SIMA demanded that the import duty on cotton be reduced from 10 per cent to five per cent and the commodity be exempted from four per cent of special countervailing duty. The centre should announce a fibre policy at the earliest and withdraw the one per cent duty drawback extended to cotton exports.
Cotton and cotton cone yarn should be exempted from the value-added tax and Central Sales Tax. The Centre should provide a four per cent interest subvention on working capital loans for the domestic industry.