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Tamil Nadu textile industry faces closure

Chennai, Jan 19 (): Tamil Nadu textile industry which employs fifty lakh people and earns Rs 50,000 crores in foreign exchange faces a virtual shut-down with the hike in diesel price.

Southern India Mills Association (SIMA) says that the hike would push cost of production by Rs 4 since the bulk purchase of diesel would cost extra Rs 11 per litre. This would affect the lives of ninety-one million workforce employed in textile industry.

Indian textile industry operating out of rural India and employing mostly women is facing a worst crisis for last two years due to fluctuations in the raw material prices.

Tamil Nadu which contributes to one-third of the textile business and accounting for 47.5% of the yarn production in the country is the worst affected due to power shortage for past four years and increased transportation cost. 95% of its raw material, cotton has to come from Gujarat and Maharashtra which costs Rs 5 per kg for lorry freight and then incur same amount to sell its produce to the power loom centres in Maharashtra.

Tamil Nadu textile industry gets only forty percent of requirement and is relying only on diesel power generation. No new investment in the textile industry has come in the last three years and 20 lakh people have lost jobs.

Bangladesh as per a study conducted by the industry associations in the international textile market offers textiles that are cheaper by 20% when compared to countries like India. The All India Motor Operators’ Association has said that since most of its members are on contract, the diesel price hike would result in renegotiation and this could cause severe damages to pricing of goods. It clearly stated that the hike would not be absorbed by the truck operators.

Railways is soon expected to hike the freight charges before the budget after the diesel hike even though it has a contract with three PSU but the levies will affect it.