The Textiles and Clothing (T&C) industry is the backbone for the Tamil Nadu economy as the State accounts 1/3rd of the Textile business of the country, with 47% spinning capacity, 36% of open end spinning capacity, 60% yarn export, 20% of powerloom capacity, 12% handloom capacity, 70% of the knitted garment manufacturing capacity, 20% TUFs investments and 80% of the spinning machinery and 75% of the spinning machinery spares and accessories manufacturing capacity and fetches over Rs.75,000 crores export earnings.
Out of 46 million working spindles in the country, 19 million spindles are in Tamil Nadu, in which over 12 million spindles are over 15 years old. The spinning sector has stalled the modernization of its manufacturing facility due to prolonged sluggishness in the market, poor export demand as a result of geopolitical issues across the globe, uncompetitive raw material prices, unduly high logistics cost, etc.
Against this background, SIMA, on behalf of the textile industry in the State, requested the Government of Tamil Nadu to announce a policy to support modernization of spinning capacity exclusively, as the Government is already providing supportive measures to the weaving and processing segments.
Now, the Department of Handlooms, Handicrafts, Textiles and Khadi, Government of Tamil Nadu vide its G.O.(Ms) No.166 dated 09.12.2024 has issued the guidelines enabling the spinners to avail 6% interest subvention for the modernization of spinning machines that are over 15 years old for a period of 5 years.
In a Press Release issued here today, Dr. S. K. Sundararaman, Chairman, SIMA has thanked the Hon’ble Chief Minister of Tamil Nadu, Thiru. M. K. Stalin and the Hon’ble Minister for Handlooms & Textiles, Thiru. R. Gandhi for announcing the unique policy and a much needed one to revive the spinning segment in the State. He has stated that the textile industry in the country, particularly in the State, is going through a crisis due to huge incentives offered by other competing States, market slowdown due to poor demand, inadequate labour availability, etc. He has also stated that the policy support from Government has come at a time when there is a dire need to modernize the spinning units in Tamil Nadu to have a level playing field and compete with other States and globally. He has added that the modernized spinning machines would increase productivity, enhance the quality and produce yarn for high value-added fabrics, made-ups and garments.
SIMA Chairman has appreciated the Government for immediately allocating Rs.10 crores for the remaining period of FY 2024-25. He also appreciated the Government for allocating 60% to ring frame modernization, 15% for air jet spinning/electro spinning and 25% for open-end spinning modernization out of the total scheme allocation. He has said that the fund allocation for open-end spinning and air jet/electro spinning would help these segments which account around 70% of the VSF yarn manufacturing and over 60% of recycled yarn production and thereby the downstream sectors in Erode and Karur regions.