The textile industry in India, particularly in regions like Rajapalayam, is facing a severe crisis due to a combination of policy failures and increased competition from cheap imported garments. Communist Party of India (Marxist) functionary B. Mariappan highlighted the detrimental effects of these issues on the domestic textile sector.
According to Mariappan, the failure of the Cotton Corporation of India (CCI) to stabilize cotton prices has dealt a heavy blow to the industry. The CCI's intended role was to maintain price stability and supply cotton to spinning mills, but its actions, such as selling cotton to corporates leading to hoarding, have exacerbated price volatility.
The imposition of GST on cotton, the only agricultural produce attracting such a tax, has further worsened the situation for spinning mills. The high volatility in cotton prices coupled with GST implications has eroded the competitiveness of domestic mills.
Moreover, the government's decision to allow the import of cheaper garments from countries like China, Indonesia, Vietnam, Sri Lanka and Bangladesh has intensified the challenges faced by the domestic textile industry. Mariappan criticized the lack of anti-dumping duties on these imports and highlighted the burden of higher import taxes on cotton, which works against domestic producers.
The crisis has led to the closure of several spinning mills, rendering hundreds of workers jobless. Those still operational often operate at reduced capacity due to lower demand, leading to financial struggles and reliance on loans. Mariappan emphasized the need for policy interventions, such as zero input tax on cotton and lower interest rates on bank loans, to support the industry.
The repercussions of the textile industry's crisis extend beyond economic concerns, with many workers turning to alternative sectors for livelihoods, further exacerbating social challenges. Particularly vulnerable are those who borrowed from self-help groups, facing difficulties in repaying loans due to unemployment.
In summary, the textile industry's woes in Rajapalayam underscore the urgent need for government action to address policy failures, mitigate imported competition, and provide support to struggling domestic producers to prevent further job losses and economic decline.
