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Textile industry in Tamil Nadu in doldrums; Tamil Nadu govt blames central policies

Tamil Nadu government has admitted that the total exports and domestic turnover of knitwear from the export hub Tirupur in the last financial year (2017-18) was hardly Rs34, 000 crore during the last financial year 2017-18 with exports going down by 5.6 per cent from the previous year due to competition from Bangladesh and Vietnam and changes in duty and tax structure, such as Goods and Services Tax (GST).

 The exports alone  from  6,500 and odd knitwear and apparel units in Tirupur used to be in the range of Rs50,000 crore worth exports a year, The sharp drop in exports are attributed to unhelpful policies of the central government coupled with fierce completion. 

Addressing the state assembly, Handlooms and textiles minister O S Manian blamed the Centre’s demonetization and GST for having resulted in the exports falling sharply. The sharp drop in exports in Tirupur reflected the national trend.. “Indian exports are also subjected to a levy of 11.4 per cent while the competitors Bangladesh and Vietnam enjoyed duty free access to the European Union. India has been negotiating with Eu for the past ten years to facilitate duty free access to our textiles but has not yielded results so far. 

Besides there is no customs duty levied in many countries, especially Bangladesh and Sri Lanka on import of yarn to produce fabric and garments meant for exports, except in India. The state chief minister has drawn the attention of Prime Minister Modi to the issues faced by the hosiery sector. But centre has not acted in the matter so far.

Another serious concern is a backlog of Rs 500 crore dues under Rebate on State Levies from the Centre to the exporting units of Tirupur since April last year. The ROSL has been slashed from 3.5 to 1.7 per cent, while the excise portion of duty drawback of 5.7 per cent also been withdrawn. 

The state government has also pleaded with the GST Council to reduce the tax on handloom and Power loom sector to 5 per cent,” Manian said. Incidentally, a performance budget tabled in the assembly said the number of cooperative handlooms and powerlooms units in the state dipped by 7,165 and 9,641 respectively last year. Value of production of handloom cloth and sale fell by 18 per cent and 19 per cent in the last two fiscals. 

The serious setback of cooperative sector began when demonetization restricted the withdrawal of sum from district central cooperative banks. The climatic changes including severe drought in cotton producing areas of the state too played havoc. The production of cotton remained minimal and could only meet 5 per cent of the total requirement of the TN spinning mills. 

The textile sector in the state is on the brink of collapse and blamed the unhelpful attitude of the centre to the problems faced by the state according to the Opposition members in the state assembly.. The price of cotton in the early 2016 hovered around Rs28, 000 per candy but the rates have shot up to Rs45, 000 now. Manian said increasing critical inputs cost had a huge impact on prices of Silk Sarees.


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