COIMBATORE: Decline in orders from the West has affected at least 35% of spinning mills and fabric manufacturers in Coimbatore and Tiruppur districts. Further, industry associations say they are unable to compete with Bangladesh, China and Vietnam despite price of cotton candy falling from Rs 1.10 lakh in 2021- 22 to -57,000 - Rs 60,000, because of imposition of 11% duty on cotton import and quality control order on certain varieties of fibre, and appealed to the union government to address the issue.
K Selvaraju, secretary general of The Southern India Mills’ Association (SIMA) said, “Despite cotton prices coming down, mills could not take advantage due to import of cotton and synthetic fabrics from Bangladesh which are cheaper by 15%, and 8 %- 15% respectively. Exports are hit as orders from western countries have fallen considerably. The government must remove the 11% import duty on cotton and help India become competitive in the global market.”
Further, he said import norms of synthetic fibre should be eased as the under the quality control order system, users can purchase polyester staple fibre from BIS licensees.
S Jagadesh Chandran, secretary of the South Indian Spinners Association (SISPA), said “Around 25% out of 2000 spinning mills in Tamil Nadu stopped operations as several leading brands have started importing fabric from Bangladesh. Other factors such as EB tariff, labour cost also impact spinning mills. Irrespective of the size, mills incur operating loss of around `20 to produce one kilo of yarn.”
Prabhu Dhamodharan, convener of Indian Textreneurs Federation (ITF) said, “Retailers in developed markets exhausted inventory in the last two quarters of 2023 and have been buying since the beginning of this year. Even though orders are coming, we are facing intense competition from Bangladesh and Vietnam. The current stability in cotton price is favourable, but we have to build competitiveness and product diversification to mitigate pressure emerging out of competition.”
He said that industry expects new measures from the government to regain competitiveness and specialization to utilize the China plus one opportunity. “We expect considerable drop in import of dyed knitted fabric from China after the imposition of additional duty which will domestic sector to gain volumes from July,” he said.