In an appeal to Union Finance Minister Nirmala Sitharaman on Friday, the textile mill associations said the industry is going through acute financial stress, due to slowdown in exports — especially in the cotton-based segment — following external factors such as the prolonged Ukraine-Russia conflict and the recent Israel-Hamas war. -
January 08, 2024 Textile mills associations have urged the government for financial relief to help them tide over the ongoing crisis owing to the slowdown in exports, along with quality control issues.
In an appeal to Union Finance Minister Nirmala Sitharaman on Friday, the textile mill associations said the industry is going through acute financial stress, due to slowdown in exports — especially in the cotton-based segment — following external factors such as the prolonged Ukraine-Russia conflict and the recent Israel-Hamas war.
The prolonged economic impact of global conflicts, coupled with challenges like an 11 per cent import duty on cotton and issues related to Man-Made Fibre (MMF) Quality Control Orders, has led to a significant drop in capacity utilisation, ranging from 50 per cent to 70 per cent, for almost a year, the statement said.
This situation has pushed many spinning mills, particularly SMEs, into severe financial stress, rendering them unable to service debts and meet standing charges, it stated.
In light of these challenges, the textile mill associations have urged the finance minister to advise the banking sector to extend financial support measures to the industry as a special case, and extend the one-year moratorium for repayment of the principal amount, converting three-year loans under ECLGS into six-year term loans and extend necessary financial assistance to mitigate the stress on working capital, on a case-to-case basis.
“We appeal to the FM to consider our 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,” Confederation of Indian Textile Industry (CITI) Chairman Rakesh Mehra added.
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- Textile mill associations urge government for financial support