Stalin cautioned that the tariff shock would not only hit textiles but also other labour-intensive industries such as apparel, leather, automotive components, machinery, gems and jewellery, marine products, and chemicals.
MK Stalin, Chief Minister, Tamil Nadu, has called on the Union government to take urgent policy measures to safeguard the state’s textile industry from the impact of proposed US tariff increases, which threaten to rise from 25 per cent to 50 per cent.
In a letter to Prime Minister Narendra Modi, Stalin warned that without swift action, as many as 3 million jobs could be at risk in a sector that employs 7.5 million people and serves as a key contributor to India’s textile exports.
Stalin’s policy recommendations focus on both immediate relief and structural reforms. Key measures include:
- Restructuring the Goods and Services Tax (GST) inverted duty structure in the man-made fibre value chain, with a uniform 5 per cent GST across the chain.
- Eliminating import duties on all cotton varieties to reduce raw material costs.
- Extending the Emergency Credit Line Guarantee Scheme with 30 per cent collateral-free loans, a 5 per cent interest subsidy, and a two-year principal moratorium.
- Raising the Remission of Duties and Taxes on Export Products (RoDTEP) scheme rate to 5 per cent.
- Expanding pre- and post-shipment credit coverage to include all textile exports, including yarn.
The Chief Minister underlined Tamil Nadu’s heavy reliance on the US market, noting that while 20 per cent of India’s exports (worth $433.6 billion) went to the US last year, the state’s dependency stood at 31 per cent of its $52.1 billion exports.
Stalin cautioned that the tariff shock would not only hit textiles but also other labour-intensive industries such as apparel, leather, automotive components, machinery, gems and jewellery, marine products, and chemicals.
He stressed that the current challenge should be used as an opportunity to address long-pending structural reforms, enabling the state to retain its leadership position as India’s textile manufacturing hub.
Industry associations consulted during the state’s review process have backed the recommendations, citing persistent challenges of GST anomalies and high credit costs that have eroded competitiveness.
News source: KNN India