Textile industry in Tamil Nadu worried over losing investments to other States

November 30, 2023 06:10 pm | Updated 11:23 pm IST

Media reports of incentives planned in the draft textile policy of Gujarat were circulated widely among the textile and apparel manufacturers in Coimbatore and Tiruppur on Wednesday, November 29, 2023.

There has been widespread concern within the industry over the past few months of investors moving from Tamil Nadu and with the textile industry in other States becoming more competitive, said a spinning mill owner in Coimbatore. “We will lose not just investments and capacities, but expertise available in this region of Tamil Nadu, if there is a flight of investments to other states,” he said.

While a couple of integrated garment units are planning investments or expansion in Madhya Pradesh, at least two more are looking at Bihar.

In states like Maharashtra and Gujarat, raw material (cotton) is readily available, and textile processing is easier as they follow marine discharge and not zero liquid discharge, these are major fabric clusters, and power cost is also subsidised, said an industry spokesperson in Coimbatore.

Palaniswamy, who makes garments for the domestic market in Tiruppur, said there was talk among some of the large-scale players in the district of outsourcing orders to manufacturers in West Bengal or other northern states that are cheaper compared to Tamil Nadu. Industries are looking to control cost of production and are hence exploring opportunities in states that offer incentives, he said.

However, migrant workers employed in textile and garment units in the western districts of Tamil Nadu are paid at least double the wages of their home state, and may not want to go back, he added.

Power cost is on the rise in Tamil Nadu, raw material (cotton or synthetic fibre) has to be procured from other States, and labour cost is also high, factors that make the textile industry in Tamil Nadu uncompetitive. Tamil Nadu should also come out with a competitive textile policy that will strengthen the industry here, say industry sources.

“If this situation continues, about 30 % of the textile units in Tamil Nadu will be closed in three years,” said K. Selvaraju, secretary general of the Southern India Mills’ Association.

According to Prabhu Dhamodharan, convenor of Indian Texpreneurs Federation, the state’s textile industry needs support from the State government to modernise and stay competitive in challenging times.

“We need to reduce our manufacturing cost to recapture the yarn export market share we lost to the rest of India.” In the fast moving coarse count yarn, Tamil Nadu’s market share is rapidly declining. “We need a one-time State government intervention by way of “modernisation subsidy”, he said.

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