Tamil Nadu CM Stalin Writes To PM Modi On Steep Increase In Cotton Prices

Stalin pointed out that another significant price differentiator between India and its competitors internationally is the 11% import duty imposed on cotton in India.

Stalin said that he hope PM would consider these favourably and expeditiously to bring back employment in the spinning mill sector.

Source : PTI

Tamil Nadu CM Stalin wrote to PM Modi regarding the steep increase in cotton prices and its impact on the cost of yarn and fabrics in downstream enterprises. Stalin noted that the spinning sector has 1500 spinning mills and around 15,00,000 employees who serve as vital engines of the industrial economy of Tamil Nadu.

In a release to PM, Stalin said, “The combination of high cotton prices, increased operational costs and poor demand in domestic and international markets has plunged the sector into such a severe crisis that the spinning mill association declared a production stoppage from July 15, 2023 onwards.”

The repayment for loans availed under ECLGS, provided by Indian government, has started and it has become an additional burden on the spinning mills and increased the cost of production, he said.

Stalin pointed out that another significant price differentiator between India and its competitors internationally is the 11% import duty imposed on cotton in India.

As a result, Stalin mentioned three specific interventions to ease the plight of the MSME-led spinning industry. Pitching for restructuring ECLGS, Stalin said, “I request the Union Government to provide financial support for MSMEs in the textile sector under ECLGS by extending the moratorium by one more year.”

Existing loans under ECLGS may be restructured, converting them into six-year term loans and fresh loans may be provided under ECLGS reducing the regular banking interest rate, he said.

Stalin insisted Centre to withdraw an 11% import levy on cotton as it will reduce the production cost significantly.

Stalin insisted to consider a ban on the export of waste cotton from India temporarily. Stalin said, “Consider a ban on the export to tide over the shortage of waste cotton being faced by the Open-End spinners who fall under the micro-enterprises category but contribute to 35% of the yam production of the country primarily used in low-end fabrics.”

Stalin said that he hope that the PM would consider these favourably and expeditiously to bring back employment in the spinning mill sector.