Diesel price hike would have an additional implication of Rs four to Rs 17 per kg in the cost of production of yarn, causing unrest in handloom and powerloom segments of textile industry, Southern India Spinning Mills (SIMA) said today.
Reacting to the increase in diesel prices by Rs 5 a litre price, SIMA Chairman S Dinakaran said in a release that besides diesel power generation costs, there would also be an substantial increase in indirect costs like transportation.
He said the escalation in costs would have serious cascading effect down the value chain in the textile industry.
Tamil Nadu accounted for one-third of textile business in the country giving direct employment to 50 lakh people, fetching Rs 50,000 crore forex earning and accounting for 47 per cent of yarn production.
The state has to procure over 95 per cent of its raw materials, particularly cotton, from states like Gujarat and Maharashtra.
Over 6 million handloom and power loom weavers across the country were suffering due to the abnormal cost of inputs in the last three years and the price hike would lead to unrest in the sectors, he cautioned.
SIMA also demanded immediate roll back of the hike to protect the industry and the people who depended on it.
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