The India Policy Has Led To The Entanglement Of The Textile Sector.

Starting in January this year,

prohibit

The time is three months.

A serious crisis has resulted in enterprises in the entire value chain, from spinning mills to garment enterprises, carrying the burden of high cost raw materials and inventory.

Although the global market shows signs of demand recovery, India yarn producers and thousands of power looms are still striving to secure contracts for overseas buyers. The crisis caused by the policy has damaged the relationship between India enterprises and overseas buyers.

Last December,

According to Rupp's knitting industry's complaints about the obvious shortage of yarn, the number of cotton yarn exports is limited to 720 million kilograms.

Because the yarn exports had already exceeded this threshold, there was almost no export yarn in the last three months of last year.

Cotton prices hoarded at the beginning of the year (October September) were very high, partly because the government decided to export 5 million 500 thousand bales of cotton at the beginning of the year.

Their problems became more complicated in April, global commodity prices plummeted, yarn prices falling, and the government lifted the export ban.

Large cotton inventories and inaccessible cotton yarn inventory led to shrinking production. Weeks later, the value chain weaving companies and garment companies increased their prices.

Yarn enterprise

In a dilemma.

If they want to resume production, they will be forced to use cotton purchased at a high price of 62000 rupees / candy from October to November (after which the price will fall to 38000 Rupees).

This may make the situation of these capital intensive enterprises worse. In recent years, they have used the textile renewal fund plan to invest in capacity expansion, and the textile renewal Fund Scheme (TUFS) is an interest subsidy scheme.

Unlike the power looms, the power looms enjoy labor flexibility, while the spinning mills have no choice. When the cost is rising and the market is not attractive, they can only suffer losses.

Most spinning mills have huge commitments to repay debt service.

The result is that the mills are still struggling to deal with unsold stocks, because the global and domestic demand situation is not conducive to the consumption of high cost cotton.

In fact, the government began to suppress the yarn industry in April last year when the government abolished the rebate of yarn rebates DEPB.

South India Textile Mills Association (SIMA)

Chairman J Thulasidharan said: cotton prices fell from 40000 rupees / candy to 63000 rupees three months ago.

Although the government increased the export limit from 5 million 500 thousand to 6 million 500 thousand, the demand for yarn remained low.

He said that the government's refusal to restore the tax rebate for cotton yarn and the tax rebate bankbook scheme abolished in April last year made the situation worse.

Thulasidharan said that the spinning mills are in arrears with bank repayment, and they should be allowed to extend the loan for one year under the TUFS plan and the repayment time of other loans.

Shishir Jaipuria, chairman of the India Textile Industry Federation (CITI), said: the crisis in the spinning industry has spread to the fabric industry, and the fabric industry is also forced to hold unsold stocks.

Most looms have been shut down for weeks to solve the problem.

Because of the huge promise of debt service, it is not feasible to postpone the repayment time of the spinning industry for a year.

DK Nair, Secretary General of India Textile Industry Federation, said: last year, TUFS assistance was stopped unexpectedly, which affected the investment momentum of the textile industry.

The textile industry needs to extend the TUFS plan to the 12th Five-Year plan, and the government is now considering the 12th Five-Year plan.

The United States, Britain, Germany, France, Italy and Spain are major markets in India, accounting for 22 billion of the total share of textile and clothing exports.

Exports to these countries in 2010-11 years showed a negative growth.

Bangladesh is a major competitor in India in terms of clothing exports. Bangladesh enjoys preferential access in developed countries.

Faced with the slow recovery of pressure and demand, India garment exporters did not expand their exports in its traditionally lucrative market.

Insiders say it is wrong to prohibit the export of cotton yarn.

Because of insufficient demand and the government's erroneous policies, the spinning mills are suffering huge losses.

Efforts to revitalize the textile market begin with encouraging the expansion of fiber consumption. For this reason, the working capital status of textile enterprises must be improved from financing and cost aspects.

Some adjustments must be made in the payment of enterprise's term loan.