India's spinning industry is concerned about overcapacity resulting from the liberal incentives provided by various state governments to attract investment within their jurisdictions. Spinning associations have urged the state governments not to provide any incentives for spinning capacity expansion or new investments until the oversupply issue is addressed.
An urgent virtual meeting of the office bearers of all associations representing spinning mills and open-end spinning mills was convened to discuss and decide on strategies for mitigating the unprecedented crisis, Dr. S K Sundararaman, chairman of The Southern India Mills Association (SIMA), has stated in a press release.
The office bearers from SIMA, the Tamil Nadu Spinning Mills Association (TASMA), the South India Spinners Association (SISPA), the Indian Spinning Mills Association (ISMA), the Recycle Textile Federation (RTF), the Rajapalayam Spinners Forum (RSF), the Andhra Pradesh Textile Mills Association (APTMA), and the Telangana Spinning & Textile Mills Association (TSTMA) participated in and discussed the issue.
The associations have expressed that there is no need for new capacity at all due to the existing overcapacity. Therefore, they are urging state-sponsored incentives to be temporarily halted. It is of utmost urgency to prevent the closure of large-scale spinning mills that have already been established in the country.
The industry bodies have proposed an initial production stoppage for one week to raise awareness among the government regarding the urgent need for relief measures. They have also advised the spinning sector throughout India to reduce production by 35 per cent or one shift to avoid distress sales and minimise losses.
The chairman of SIMA has called on the central government to extend a one-year moratorium for the repayment of the principal loan amount, convert three-year loans under the Emergency Credit Line Guarantee Scheme (ECLGS) into six-year term loans, and provide necessary financial assistance to alleviate stress on working capital on a case-by-case basis. SIMA has also consistently advocated for the removal of the 11 per cent import duty on cotton. Additionally, they have called for the prompt addressing of Quality Control Order (QCO)-related issues.
The spinning associations have jointly appealed to the chief ministers of Tamil Nadu, Andhra Pradesh, and Telangana to roll back the power tariff hike implemented in recent years for a duration of one year as a significant relief measure by the state government.
ALCHEMPro News Desk (KUL)
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