Textile mills in ‘severe financial stress’, seek govt. support

Published - January 06, 2024 08:01 pm IST - Coimbatore

Textile mill associations have submitted a joint memorandum to Union Finance Minister Nirmala Sitharaman seeking financial support.

The associations have sought extension of one-year moratorium for repayment of the principal amount; conversion of three-year loans under the Emergency Credit Line Guarantee Scheme (ECLGS) into six-year term loans, and extension of necessary financial assistance to mitigate the stress on working capital, on a case-to-case basis.

The association said in press release that under the ECLGS, ₹16,920 crores were disbursed to the textile industry as of September 30, 2022. The spinning segment faces a crisis with a 50% decline in cotton yarn exports, a 23% drop in overall export of cotton textiles, and an 18% reduction in total textiles and clothing products in 2022-2023 compared with the previous year. Capacity utilisation in the mills is 30%-50% and “this dire situation has pushed many spinning mills, particularly SMEs, into severe financial stress,” the association added.

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