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The Textile Magazine
JUly 2012
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9
The textile industry was also
affected by volatile cotton prices,
high cost of inventory carried
forward, rising interest rates, with-
drawal of export incentives and
levy of additional excise duty on
readymade garments. The finan-
cial gains realised during 2010-11
were negated by the first quarter
of 2011-12. Imposition of restric-
tion on cotton yarn export and the
high cost of working capital forced
many mills to dump yarn made out
of expensive cotton in the do-
mestic market at very low prices,
resulting in huge losses.
Many textile units also closed/
suspended operations or experi-
enced lower capacity utilisation
due to power shortage and issues
relating to environmental con-
cerns.
The uncertain and unpredict-
able Government policy on cotton
and yarn export is posing a threat
to the new entrants. It also made
the existing players defer their
investment proposals for capacity
expansion or modernisation. Only
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