Cotton Yarn Exports Slump 50%: Textile Industry Begs Sitharaman for Bailout

New Delhi, Jan 6 (KNN) Textile mill associations in India have jointly appealed to the Union Minister of Finance, Nirmala Sitharaman, drawing attention to the severe financial strain experienced by the spinning segment of the textile industry.

This plea is followed by a significant downturn in the cotton-based spinning sector, intensified by external factors such as the prolonged Ukraine-Russia conflict and the recent Israel-Hamas war.

Despite being a crucial contributor to India's economy, the textile industry faces challenges.

The spinning segment now confronts a severe crisis with a 50 per cent decline in cotton yarn exports, a 23 per cent drop in overall exports of cotton textiles, and an 18 per cent reduction in total textiles and clothing products during the financial year 2022-23 compared to the previous year.

The prolonged economic impact of global conflicts, compounded by challenges like an 11 per cent import duty on cotton and issues related to MMF Quality Control Orders, has resulted in a significant drop in capacity utilisation, ranging from 50 per cent to 70 per cent, for nearly a year.

This dire situation has placed many spinning mills, particularly Micro, Small and Medium Enterprises (MSMEs), under severe financial stress, making them unable to service debts and meet standing charges.

Consequently, many units have become SMA-1, SMA-2, and NPA accounts.

In response to these challenges, the textile mill associations earnestly urge the finance minister to advise the banking sector to treat the spinning segment as a special case and implement certain financial support measures.

These measures include, extending the one-year moratorium for the repayment of the principal amount, converting three-year loans under the Emergency Credit Line Guarantee Scheme (ECLGS) into six-year term loans, and providing necessary financial assistance to alleviate stress on working capital on a case-to-case basis.

Rakesh Mehra, Chairman, Confederation of Indian Textile Industry, stated, "We eagerly appeal to your good self to consider our above pleas favourably to mitigate the unforeseen crisis plaguing the spinning sector, prevent job losses to several lakh people, sustain the market share, and achieve the envisaged export targets."

This joint appeal emphasises the urgency of addressing the financial challenges faced by the spinning segment to ensure the continued growth and stability of the textile industry, a key pillar of India's economic strength.

(KNN Bureau)