Eight textile industry associations demands relaxation of the Canotage law to help cut costs in transporting cotton from Gujarat to Tamil Nadu as doing away with the law would help save hundreds of crores of rupees.
According to the textile industries association almost 50% of the cotton used for textile manufacturing in Tamil Nadu is purchased from Gujarat. And, the transit of the cotton is done through three modes; rail, road and water.
The Associations in and around Coimbatore invited the minister of state for road transport, national highways and shipping, Pon Radhakrishnan for a discussion on strategies to make Indian textile industries globally competitive. During the discussion on Sunday, one of the presentations focused on the need to relax the Cabotage Law.
According to Karthik Durai, one of the directors of Texprenuers Forum that hosted the discussion said that the transit of cotton by road costs 820/bale or 4.8/Kg and 680/bale or 4/Kg by ship. But, transit by seas is difficult because there are not enough Indian containers that carry the good in the ship. And, it takes 25 days for the cotton to reach the mill, while they have to pay the ginners within 21 days. This forces them to transport cotton by road most times.
Karthik said if the Cabotage laws are relaxed, the industry would save almost 250/bale. Tamil Nadu purchases 70,00,000 bales from Gujarat every year. If they save 250/bale, the industry will save about 175 crore.
Radhakrishnan has assured the textile entrepreneurs that they message would be conveyed to the Prime Minister and the Union minister for transport Nitin Gadkari, and measures pertaining to the matter would be taken up soon.
According to the law, an Indian vessel will be given first preference for the transport of goods from one port to another within the country. Only if an Indian vessel was unavailable, will a foreign vessel be allowed to transport the goods after receiving license from India's maritime regulator.
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