Rakesh Mehra, Chairman, Confederation of Indian Textile Industry (CITI) has urged Nirmala Sitharaman, Union Minister of Finance to bailout spinners of the current severe financial strain being faced in the segment.
Since the last few months, the Indian spinning segment has been experiencing a severe downturn intensified by external factors such as the prolonged Ukraine-Russia conflict and the recent Israel-Hamas war.
The segment experienced a 50 per cent decline in cotton yarn exports alongwith a 23 per cent decline in textile exports. Total textiles and clothing exports dropped by 18 per cent during the FY 2022-23 compared to the previous year.
Capacity utilisation in the segment also dropped by almost 70 per cent due to factors like a prolonged economic impact of global conflicts, an 11 per cent import duty on cotton and issues related to MMF Quality Control Orders.
This placed many spinning mills, particularly Micro, Small and Medium Enterprises (MSMEs), under severe financial stress.
To deal with these challenges, textile mills association have urged the finance minister to introduce support measures like, extending the one-year moratorium for the repayment of the principal amount, converting three-year loans under the Emergency Credit Line Guarantee Scheme (ECLGS) into six-year term loans, and providing necessary financial assistance to alleviate stress on working capital on a case-to-case basis.
These measures will help spinners mitigate the current crisis in the sector, prevent job losses, sustain their market share and achieve the set export targets, adds Mehra.
