Address grievances of textile units: Stalin to Modi

As textile units in Tiruppur, Erode, and Karur districts went on a two-day strike, Tamil Nadu Chief Minister M K Stalin on Monday wrote to Prime Minister Narendra Modi about “serious disruptions” faced by the textile industry. Stalin demanded Modi’s immediate intervention in reducing the prices of yarn and cotton.

In the letter, Stalin said the Union Government, based on suggestions from the state government, notified the withdrawal of import duty levied on cotton. Despite this, the situation has not improved and prices of cotton and yarn continue to rise, Stalin said.

The precarious situation has widespread ramifications for the textile industry in Tamil Nadu, Stalin said, adding that a large number of spinning, weaving and garment units face the danger of closure due to unsustainable demands on their working capital and price mismatch between the agreed price of supply to the buyer vis-a-vis the cost of production.

“As a result, the manufacturers of garments are suffering huge losses and many MSME units have already closed their operations. This has resulted in massive job losses in a sector that is traditionally an employment generator,” he said.

Stalin demanded that the Union Government make stock declaration for cotton and yarn for all spinning mills mandatory so that ginners and cotton traders can obtain actual data on cotton and yarn availability.

On the Union Government waiving import duty on cotton till September 2022, he said as it takes more than three months for the consignment to reach Indian ports after entering the contract, effectively import duty waiver will be available only up to June 30, 2022.

“Therefore, the Union Government may issue suitable clarifications that waiver of import duty will be available for all contracts entered up to September 30,” he said.

He also demanded that the cash credit limit of the spinning mills to purchase cotton may be extended up to 8 months in a year. Similarly, margin money sought by the banks at 25 per cent of purchase value may be reduced to 10 per cent since banks are calculating the purchase stock value at lesser rates than the actual purchase/market rates in the market, he said.