Small-scale textile mills in Tamil Nadu are facing an existential threat due to raw material price volatility and aging machinery. The South India Spinners Association has called for government intervention and subsidies.

  • Price volatility of raw materials is the primary cause of mill closures.
  • Call for permanent removal of import duties on cotton.
  • Demand for a 25% capital subsidy for modernization.
  • Nearly 100 units have shut down in the last five years.

The small-scale textile sector in Tamil Nadu is grappling with significant economic challenges. R. Arunkarthik, President of the South India Spinners Association, has emphasized that the economic viability of these mills depends heavily on the availability of raw materials at stable and reasonable prices.

Speaking at the Association’s annual meeting, Arunkarthik highlighted that the extreme volatility in raw material pricing is a leading driver behind mills becoming 'sick' or financially unviable. To combat this, he has urged the Union Government to permanently remove import duties on cotton to drive down domestic prices.

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Why This Matters

BozokMedia analysis shows that the instability in the textile supply chain poses a systemic risk to the regional economy. Without a structured auction system and localized warehousing, small players will continue to lose ground to larger, more resilient conglomerates.

Volatility in raw material prices is one of the main reasons for the textile mills going sick.

The Association has further proposed that the Tamil Nadu government should support cotton cultivation by providing financial aid to farmers for automation and high-quality seeds. Additionally, the establishment of a dedicated cotton and fiber auction center is being sought to allow foreign companies to sell raw materials directly to local mills.

A critical infrastructure gap was also identified: the Cotton Corporation of India needs to establish a warehouse in Tamil Nadu to facilitate direct purchases by smaller mills. Furthermore, the industry is struggling with outdated technology, with much of the machinery being 10 to 25 years old. Because modernization is capital-intensive, small mills are hesitant to upgrade without significant state support.

To address this, the Association is requesting a 25% capital subsidy, similar to models implemented in states like Maharashtra and Madhya Pradesh. Despite these hurdles, the mills are currently operating at 95% capacity, driven by a rising demand for specialty yarns.

Did You Know?: Coimbatore, the hub of this news, is often referred to as the 'Manchester of South India' due to its massive textile industry.

Frequently Asked Questions

Question 1: What is the main demand of the South India Spinners Association?
Answer: They are demanding raw material security, removal of import duties, and capital subsidies for modernization.

Question 2: How many textile units have shut down recently?
Answer: Approximately 100 member units have shut down operations in the last five years due to the industry slowdown.