Southern India spinning mills urge textile ministry to expedite bailout package

The spinning mills of southern India is currently facing inevitable liquidity crunch caused by increasing yarn stock, poor offtake and long pending TUF subsidies. Southern India Mills’ Association (Sima) chairman T Rajkumar in his interactive meeting with Union textile commissioner Kiran Soni Gupta on Monday, urged Gupta to expedite the bail-out package to save thousands of small and medium units from becoming non-performing assets.

A fund of R3,000 crore should be allotted in the forthcoming Budget to clear all the subsidies pending right from April 1, 2007 and protect over R65,000 crore of investments from becoming NPAs.

According to T Rajkumar, the textile industry, mainly spinning sector, is undergoing a stern crisis due to issues relating to TUFS (technology upgradation fund scheme), higher tariff rates for Indian textile products in all the major international markets, power-related issues and currently precipitous drop in cotton prices internationally and MSP operations in the domestic market.

The mills have been mainly affected by sudden drop in the yarn exports from April 2014 owing to cutdown in demand from China, a major market for yarn, and also with Pakistan granted GSP plus (Generalised System of Preferences) by EU.

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