The open-end spinning mills stopped production from July 10 and the MSME mills joined the strike on Saturday.
| Photo Credit: S. Siva Saravanan
A large number of textile mills in the micro, small and medium-scale (MSME) segment downed shutters on Saturday citing high production cost that made operation of the units unviable.
G. Venkatesan, vice-president of the South India Spinners’ Association, said the production of goods worth ₹85 crore was affected on Saturday alone. This closure will cause revenue loss for the government with respect to GST payment and power cost, among others. The mills have also decided not to sell yarn till the situation improves.
The State government should revise the power costs for textile units and the Central government should have a ‘one nation-one policy’ for the entire textile industry. Several States are offering incentives to textile units and yarn from the northern States is sold in Tamil Nadu at a lesser cost, he said.
The association demanded immediate withdrawal of 11% import duty on cotton. The open-end spinning mills stopped production from July 10 and the MSME mills joined the strike on Saturday.
Ravi Sam, chairman of Southern India Mills’ Association, and T. Rajkumar, chairman of Confederation of Indian Textile Industry, told presspersons here on Saturday that the textile industry was going through an unprecedented phase as there was absolutely no demand for yarn.
“Tiruppur received just 50% of its orders this year and Karur has not seen growth. So, there is no demand for yarn due to multiple factors,” said Mr. Rajkumar.
Mr. Ravi said that because of the 11% import duty on cotton, there was no level-playing field. Further, spindleage has increased across the country.
They also demanded withdrawal of the import duty on cotton and a two-year moratorium to repay term loan and Emergency Credit Line Guarantee Scheme loans.