Texpreneurs push for exemption of cotton mills from Cabotage rule

YarnsandFibers News Bureau 2014-12-04 10:00:00 – Coimbatore

Texpreneurs Forum keep in mind the anomalous increase in diesel price and consequent rise in transportation cost which has seriously impacted the competitiveness of mill sector in the state has urged the Minister of State, Ministry of Shipping Pon Radhakrishnan to exempt all cotton textile mills in the State from Cabotage Rule.

The present Cabotage Rule does not permit the use of foreign vessels in domestic transportation,

Cotton textile mills in the State should be free from Cabotage Rule for a period of five years and allowed to use foreign vessels for transporting cotton from Gujarat till the infrastructure is streamlined in the country,

As cotton is procured from Gujarat and Maharashtra, the mill sector spends Rs. 40000 to 50000 for transporting 50 bales (of 170 kgs each) by lorry from Mundra in Gujarat to Namakkal in Tamil Nadu which works out to almost Rs.4.90 /kg of cotton.

Whereas, the transportation cost for 150 bales (of 170 kg each) per container from Chennai port to China ranges between $100 and $350. This effectively works out to Rs. 2.25 a kg, including the lorry freight from Namakkal to Chennai.

Suggesting the use of idle EXIM containers lying at West Coast ports to transport cotton bales to major textile clusters in TN to reduce transportation cost, industry representatives said that these containers could be diverted to container deficit areas on its return.

D Prabhu, Secretary, Texpreneurs Forum pointed out that against production of 5 lakh bales of cotton in TN, the spinning sector here consumed over 120 lakh bales annually.

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