Save Textile Industry From Crisis: Stalin to Goyal

Multiple levies by the BJP regime and skewed auction policy by the Cotton Corporation of India (CCI) has pushed the textile industry in Tamil Nadu into a deep crisis, requiring immediate remedial measures by the Union Government. The present crisis has led to “mass cancellation of export orders and hardships in fulfilling longterm export commitments” by the textile industry in Tamil Nadu, which is the second largest employment provider in the State and which accounts for one-third of India’s textile business. Voicing these serious concerns made in a representation by the ‘Apparel Manufacturers of Tamil Nadu’, Chief Minister, Mr. M.K. Stalin in a letter to the Union Textiles Minister, Mr. Piyush Goyal, dated November 27, has sought his urgent intervention to defuse the crisis of unviability facing the state’s textile sector and avert large scale job losses and imminent closure of apparel and home textile units. Mr. Stalin said in his letter that one major reason for the “situation of cotton and yarn price volatility and its impact on the prices of fabrics and garment” is the tyranny of multiple levies. The Union Government has imposed a five per cent Basic Customs Duty (BCD), five percent Agriculture Infrastructure Development Cess (AIDC) and a 10 percent Social Welfare Cess on these in the 2021-22 Union Budget. This amounts to imposition of an overall 11 percent import duty. Another reason for the spurt in cotton prices is the “bulk discount” offered by CCI to traders who procured almost 70 percent of the Minimum Support Price (MSP) cotton auctioned by CCI, at a lower rate during the cotton season, “due to availability of 90 days free period”. This led to speculation in the cotton market, triggering price volatilities. The Chief Minister urged Mr. Goel to direct the concerned Ministries to intervene and take effective policy measures to remedy the situation and protect the textile industry. These should include removal of the net 11 percent import duty on cotton to avoid speculation in the coming months, he urged. Mr. Stalin further sought revamping the commercial terms and conditions prescribed by the CCI for e-auction of cotton by reducing the ‘minimum lot size’ to 500 bales, which is sustainable for the MSMEs’ (Micro, Small and Medium Enterprises). Further yarn manufacturers should be given priority in cotton procurement over the traders. Mr. Stalin also urged the union minister to extend the five percent ‘interest subvention’ to the spinning mills towards procurement of cotton during the peak season (December to March). “I would be grateful if you could kindly instruct the concerned Ministries to take necessary action in this regard at the earliest,” the Chief Minister added....