TN's textile sector turns on the federal government to restore its former grandeur.
The textile industry in Tamil Nadu is appealing to the central government to remove the 11% import duty on cotton to regain its competitive edge in the global market.
COIMBATORE: The decline in orders from Western countries has severely impacted at least 35% of spinning mills and fabric manufacturers in Coimbatore and Tiruppur districts. Industry associations report difficulty in competing with Bangladesh, China, and Vietnam, despite the price of cotton candy falling from ₹1.10 lakh in 2021-22 to ₹57,000 - ₹60,000. The 11% duty on cotton imports and quality control orders on certain fibre varieties are major hurdles.
K. Selvaraju, Secretary General of The Southern India Mills’ Association (SIMA), emphasized the issue, stating, "Despite falling cotton prices, mills can't benefit due to cheaper cotton and synthetic fabric imports from Bangladesh, which are 15% and 8%-15% cheaper respectively. Exports are also suffering as orders from Western countries have dropped significantly. The government must remove the 11% import duty on cotton to help India become competitive globally."
Selvaraju also suggested easing import norms for synthetic fibre, as under the current quality control order, polyester staple fibre can only be purchased from BIS licensees.
S. Jagadesh Chandran, Secretary of the South Indian Spinners Association (SISPA), noted that "around 25% of the 2000 spinning mills in Tamil Nadu have ceased operations, as leading brands now import fabric from Bangladesh. Factors such as electricity tariffs and labor costs further impact the mills. Regardless of their size, mills incur an operating loss of around ₹20 per kilo of yarn produced."
Prabhu Dhamodharan, Convener of the Indian Texpreneurs Federation (ITF), highlighted, "Retailers in developed markets exhausted their inventory in the last two quarters of 2023 and have been purchasing since the beginning of this year. Although orders are returning, we face intense competition from Bangladesh and Vietnam. The current stability in cotton prices is favorable, but we need to build competitiveness and diversify products to mitigate pressure from competition."
Dhamodharan added that the industry anticipates new government measures to regain competitiveness and specialization to leverage the China-plus-one strategy. He expressed optimism, saying, "We expect a considerable drop in the import of dyed knitted fabric from China after the imposition of additional duty, which will allow the domestic sector to gain volumes from July."
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