The textile mill associations on Friday sought financial support measures for India’s spinning segment which is hit by the prolonged Ukraine-Russia conflict, the recent Israel-Hamas war, an 11% import duty on cotton and issues related to Quality Control Orders on man made fibre l.
Citing a 50-70% drop in capacity utilization 50% to 70%, the Confederation of Indian Textile Industry (CITI) sought extension of the one-year moratorium for repayment of the principal amount, and conversion of three-year loans under Emergency Credit Line Guarantee Scheme (ECLGS) into six-year term loans.
Rakesh Mehra, CITI chairman also pushed for an extension of “necessary financial assistance to mitigate the stress on working capital, on a case-to-case basis” to mitigate the unforeseen crisis plaguing the spinning sector, prevent job losses to several lakh people, sustain the market share, and achieve the envisaged export targets.
The textile industry had received critical support worth Rs 16,920 crore under the ECLGS, constituting approximately 6% of the total disbursement of Rs 2.82 lakh crore as of September 30, 2022.
However, the spinning segment now faces a severe crisis with a 50% decline in cotton yarn exports, a 23% drop in overall exports of cotton textiles, and an 18% reduction in total textiles and clothing products during the financial year 2022-23 compared to the previous year, CITI said.