Just a few days the back, textile and apparel industry in Tamil Nadu protested strongly by organising closure and hunger strike for a day on the issue of increasing yarn price.
Now, MK Stalin, Chief Minister, Tamil Nadu has urged the Union Minister of Textiles on the same. He wrote a letter to Piyush Goyal and said that the present crisis has led to mass cancellation of export orders and hardships in fulfilling long-term export commitments.
“If this situation is not reined in, large number of apparel and home textile units may soon become unviable resulting in closure and consequent large scale unemployment and industrial unrest. I understand that one of the major reasons for the cotton price volatility is due to the imposition of 5 per cent Basic Customs Duty (BCD), 5 per cent Agriculture Infrastructure Development Cess (AIDC) and 10 per cent Social Welfare Cess imposed on these components in the Union Budget 2021-22, which amounts to imposition of an overall import duty of 11 per cent. Another reason for spurt in cotton prices is the bulk discount offered by the Cotton Corporation of India (CCI) to the traders who procured almost 70 per cent of MSP cotton auctioned by CCI at a lower rate during the cotton season due to availability of 90 days free period and thereafter speculated the market,” the letter reads.
He requested the Textiles Minister to direct the concerned ministries to intervene and take the policy measures to remedy the situation, protect the textile industry and prevent loss of jobs.
He urged for the removal of 11 per cent import duty levied on cotton to avoid further speculation in the coming months, revamp the commercial terms and conditions prescribed by the CCI for e-auction of cotton by reducing the minimum lot size to 500 bales which is sustainable for the MSMEs. Further, yarn manufacturers may be given priority in the procurement of cotton over traders.
The CM also urged to extend 5 per cent interest subvention to the spinning mills towards procurement of cotton during peak season (December to March).