Andhra Pradesh

Workers at spinning mills staring at a bleak future

The lockdown is estimated to have rendered 50,000 workers unemployed.

The lockdown is estimated to have rendered 50,000 workers unemployed.  

The ongoing lockdown and a U.S-China trade war have dealt a double whammy to the industry

Over 50,000 migrant daily workers from Tamil Nadu, Odisha and other States are staring at a bleak future, with 120 spinning mills in the district shutting down since March 25 in the wake of an ongoing nationwide lockdown aimed at curbing the spread of COVID-19.

The lockdown comes on the back of an unprecedented crisis that has gripped textile mills as they have declared production holidays owing to a hike in minimum support price and the U.S.-China trade war which has affected exports to China. Now, with exports to China coming to a complete halt due to COVID-19, the spinning industry has gone into a tailspin.

“China has been a major importer of cotton for several years, and the ban on exports has hit the industry hard. The domestic demand has also slackened due to stiff competition. Moreover, the cost of production is also going up,” said chairman of A.P. Spinning Mills Association, Lanka Raghurami Reddy.

Even the prices of candy have gone up by 25% with each candy fetching ₹43,000. The delay in release of power subsidies to the tune of ₹1,200 crore has come as the final nail in the coffin, forcing millers to shut down the mills.

The industry has also been hit due to delay in payments from the U.S. and Europe, and many spinning mill managements are not in a position to repay loan instalments and loan interest amounts.

The spinning mill associations have urged Chief Minister Y.S Jagan Mohan Reddy to release outstanding subsidies which were not paid by the previous government for the last four years, and have also sought deferment of payment of power bills to discoms for 3 months without interest and suspend the rule of payment for minimum consumption units and minimum MD charges.

Further, Mr. Raghurami Reddy has requested the State Government to recommend to the Union government a waiver of interest payment on all loans of textile units, including CC limits, for six months, and a moratorium of two years for the existing term loans.

Cotton yarn from A.P. is known for its superior quality, and every day, four million kg of yarn is produced. Indian Cotton, known for its fine texture, used to be exported to China but with the ongoing U.S.-China trade war continuing, the exports have almost come to a standstill.

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Printable version | May 25, 2020 9:14:40 PM |

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