The Telangana Spinning & Textile Mills Association (TSTMA) has sent an SOS to the Central government asking for help to ensure that healthy mills do not face closure due to adverse external factors.
In a representation made to Santosh Kumar Gangwar, Union Minister of State for Textiles (Independent Charge), the association has cautioned that 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. TSTMA, in fact, wants textile mills to be offered a two-year moratorium on term loans and conversion of working capital into working capital term loan with the repayment period of 3-5 years. It has also requested for reduction of interest rates for textile mills on term loans to base rate.
The predominantly cotton-based Indian textile industry provides jobs to over 10.5 crore people fetching over $42 billion forex earnings. It is the largest manufacturing sector and backbone for the economy of the nation.
M Anantha Reddy, General Secretary, Telangana Spinning & Textile Mills Association, says that the cotton segment, spinning and weaving segments are 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 US. Prices of finished goods, cotton and synthetic yarns have been on continuous decline over the last 18 months and have reduced by more than 30 per cent and have completely eroded the margins of industry. Most of textile units are suffering huge losses at 15-20 per cent of turnover and are under severe strain.
The association wanted a cotton price stabilisation fund scheme consisting of cotton working capital loan at 7 per cent interest rate (or 5 per cent interest subvention), reduction of margin money to 10 per cent from 25 per cent and increasing the credit limit to nine months from three months.