TSTMA call for Central govt to address problem of textile mills

The cotton segment, spinning and weaving segments have been suffering from April 2014 onwards due to glut in the export market caused due to policy changes in China and the duty structure in EU, China and the Americas, said M. Anantha Reddy, General Secretary, The Telangana Spinning & Textile Mills Association (TSTMA).

To address their concerns on a priority basis to ensure that good thriving mills do not face closure due to adverse external factors, TSTMA has called upon the Central Government.

In a representation made to Santosh Kumar Gangwar, Union Minister of State for Textiles (Independent Charge), the association stated any delay in addressing the problems of Textile Mills would make several hundreds of textile units in the country economically unviable resulting in large scale NPAs in the textile industry.

They wanted Textile Mills two year moratorium on term loans and conversion of working capital into working capital term loan with the repayment period between three to five years. To reduce interest rates for Textile mills on Term loans to Base rate.

Most of Textile units are suffering huge losses between 15-20 per cent of turnover and are under severe strain as prices of finished goods, cotton and synthetic yarns have been on continuous decline over last 18 months and have reduced by more than 30 percent and have completely eroded the margins of Industry.

The association wants a cotton price stabilization fund scheme consisting of cotton working capital loan at 7 percent interest rate (or 5 percent interest subvention), reduce margin money from 25 percent to 10 percent and increasing the credit limit from three months to nine months.

The predominantly cotton based Indian textile industry is the largest manufacturing sector and backbone for the economy of the nation as it provides jobs to over 105 million people fetching over $ 42 billion forex earnings.