Tirupur Yarn Makers Seek Govt Support

Introduction to the Textile Industry in India

The textile industry is one of the largest and most significant sectors in India, providing employment to millions of people and contributing substantially to the country's GDP. The industry is diverse, with various segments, including spinning, weaving, knitting, and garment manufacturing. The Tirupur Yarn Manufacturers Association, a prominent body representing the interests of yarn manufacturers in the region, has been actively seeking support from the government and other stakeholders to address the challenges faced by the industry.

Tirupur Yarn Manufacturers Association Seeks Support

The Tirupur Yarn Manufacturers Association has called for support from garment units to seek steps by the Union government to change the role of the Cotton Corporation of India (CCI). The association wants the CCI to not only procure cotton from farmers at Minimum Support Price but also keep stocks and support the textile industry with stable raw material prices.

The China National Cotton Reserves Corporation maintains more than a year’s cotton stock and ensures stability in cotton prices. The Tirupur Yarn Manufacturers Association met with the Apparel Export Promotion Council (AEPC) and the Tiruppur Exporters Association (TEA) to discuss the issue.

Cotton Price Volatility

Yarn price is influenced by cotton price, which accounts for 65% - 70% of yarn manufacturing cost. The steep increase in cotton prices (around 30% in the domestic market and 50% in the international market) reflected in the yarn prices. However, with international cotton prices softening to 82.17 cents a pound from 91.55 cents a pound, yarn prices also declined to Rs. 379 a kg from Rs. 384 a kg.

Many garment buyers and brands nominate specific ginners for cotton procurement, leaving spinning mills with limited access to credit. The mills make upfront payments to buy cotton from the nominated ginners, but many garment manufacturers continue to avail of credit from the mills for long durations, resulting in a significant working capital imbalance across the textile value chain.

Need for Modernization

Over 70% of spinning mills could not modernize in recent years due to sluggish yarn exports. Of the 45 million spindle working capacity in the country, over 20 million are more than 10 years old. If the mills do not modernize, there will be a shortage of yarn, the yarn manufacturers reasoned.

• The association sought the support of the garment sector for the total removal of the 11% import duty on cotton.
• Modifying the role of the CCI to ensure stable cotton prices.
• Ensuring timely payments to the spinning mills within the mutually agreed credit terms.

“We seek your cooperation in ensuring a more balanced payment mechanism across the value chain, particularly in view of the prevailing financial pressures on the spinning sector,” the yarn manufacturers association said.

Expert Perspective

Industry experts believe that the government's support is crucial in addressing the challenges faced by the textile industry. The stabilization of cotton prices, removal of import duty, and modernization of spinning mills are some of the key measures that can help the industry to grow and become competitive in the global market.

Implications for Readers in India

The textile industry is a significant contributor to India's economy, and any changes in the industry can have a ripple effect on the entire economy. The stabilization of cotton prices and the modernization of spinning mills can lead to increased employment opportunities, higher GDP growth, and improved living standards for people involved in the industry.

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What to Watch Next

The government's response to the demands of the Tirupur Yarn Manufacturers Association will be crucial in determining the future of the textile industry. The association's efforts to seek support from the garment sector and other stakeholders will also be closely watched. The industry is expected to see significant changes in the coming months, and it will be interesting to see how the government and other stakeholders respond to the challenges faced by the industry.

Conclusion

The Tirupur Yarn Manufacturers Association is seeking support from the garment industry to address the issues of cotton price volatility, working capital imbalance, and the need for modernization. The association believes that with the support of the garment sector, the Union government can take steps to modify the role of the CCI and ensure stable cotton prices, which will benefit the entire textile value chain.

Background and History

The textile industry in India has a long and rich history, dating back to the colonial era. The industry has undergone significant changes over the years, with the government playing a crucial role in its development. The establishment of the Cotton Corporation of India (CCI) in 1970 was a significant milestone in the industry's history, as it helped to stabilize cotton prices and ensure a steady supply of raw materials to the textile mills.

Timeline of Events

The Tirupur Yarn Manufacturers Association has been actively seeking support from the government and other stakeholders for several years. Some of the key events in the association's efforts include:

• 2018: The association met with the Union Minister of Textiles to discuss the issues faced by the industry and seek support for the removal of import duty on cotton.
• 2020: The association submitted a memorandum to the Apparel Export Promotion Council (AEPC) and the Tiruppur Exporters Association (TEA) seeking support for the modification of the CCI's role and the stabilization of cotton prices.
• 2022: The association met with industry experts and stakeholders to discuss the challenges faced by the industry and seek support for the modernization of spinning mills.

Challenges and Opportunities

The textile industry in India faces several challenges, including cotton price volatility, working capital imbalance, and the need for modernization. However, the industry also presents several opportunities, including the potential for increased employment opportunities, higher GDP growth, and improved living standards for people involved in the industry.