SIMA seeks special package to boost cotton consumption

The 14th CEO conference of Southern India Mills’ Association – SIMA TEXPIN 2020 was held virtually on theme ‘Competitiveness of Indian Textile Industry in Global Market’. Roop Rashi, IA&AS, textile commissioner, was chief guest of the event. Through the conference, SIMA made an appeal of various challenges & opportunities of Indian T&C industry to the ministry. 

Agneshwar Sen, head, trade policy, associate partner, Ernst & Young LLP, Gurgaon and Chinmaya Goyal, senior manager, Ernst & Young LLP, Gurgaon addressed on the conference’s theme ‘Competitiveness of the Indian Textile Industry in the Global Market’. The welcome note was presented by SIMA chairman – Ashwin Chandran. 

Chandran appreciated and thanked the textiles ministry for aggressively addressing various issues confronting the Textiles & Clothing (T&C) industry during Covid-19 pandemic period and also for taking various proactive measures to make the industry globally competitive. Several historical reforms like bringing entire cotton textile value chain under 5 per cent GST, removing anti-dumping duty on PTA and rejecting the proposed ADD on PSF and MEG, facilitating coastal movement of textile goods, providing transshipment facilities for raw cotton in all the major ports especially Tuticorin and Kochi, reduction of hank yarn obligation from 40 per cent to 30 per cent, etc, were appreciated.  

SIMA suggested that a major portion of the TUF subsidy could be released against bank guarantee and the balance could be released after the completion of JIT. Since JIT inspection has been stalled due to COVID-19 pandemic, the industry is not able to get the funds. As the volume of work for JIT is getting accumulated with the limited manpower, it would take years to complete the JIT and release the subsidies. Therefore, the Association requested the ministry to commence the JIT immediately with necessary precautions and also simplify the guidelines and protocols so that the scheme becomes industry-friendly.  

Another point raised by the Association was that, though the government has announced several relief measures to mitigate COVID-19 challenges, the debt restructuring facilities for non-MSMEs are available only when the accounts are standard as on March 1, 2020. As the T&C industry had been facing long drawn recession, the ministry had recommended two years moratorium period in November 2019. Considering the severe financial stress being faced by the industry, SIMA requested to extend the moratorium further. 

“At the cotton stakeholders meeting and subsequent internal meeting organised by the textile commissioner earlier on September 21, 2020, the closing stock for the cotton season 2019-20 was estimated as 105 lakh bales. For the cotton season 2020-21, the acreage is likely to further increase and therefore, it might reach a record crop of 400 lakh bales in the coming season. However, under the current COVID-9 lockdown and pandemic situation, we might be in a position to reach the normal few more. The export demand would also be lesser as the world cotton stock position would also increase steeply. CCI would incur huge losses and we might carry a huge stock for a longer duration. Cotton being a bio-degradable material, the quality parameters like strength and grade would deteriorate over a period, said Chandran. 

“Therefore, there is an urgent need to announce a special package for boosting cotton consumption by including all the cotton textile products under IES, MEIS and RoSCTL/RoDTEP and also announce a special incentive of 4 per cent for cotton yarn, 5 per cent for fabric and 6 per cent for garments and made-ups to boost exports and increase cotton consumption. In this regard, we have already made a representation to the HMOT and therefore based on the recent estimate and also the request made by the industry at the cotton stakeholders’ meet, we request your goodself to kindly make a recommendation to the government in this regard.”  

The textile commissioner in her speech highlighted few facts at the conference. 

“Textiles is the largest employment provider after agriculture and the government would extend its support to the industry,” said Rashi. “Even smaller countries like Bangladesh and Vietnam overtakes India in T&C exports, despite India having large production capacity. As far as the government is concerned, it would act as a facilitator and would support the industry. 

“Textile markets are strong domestically. The industry should focus on the challenges faced in value addition. The government would only extend policy support to the industry. There are a lot of suggestions coming from the industry and the government will consider the same. 

“With regard to the TUF Scheme, the ‘Horizons Beyond Spinning’, a conference conducted by SIMA during 1997 was the forerunner for bringing TUF Scheme. There are certain procedural angles in the implementation of TUFS Scheme and needs to be made industry-friendly.” 

Rashi suggested that the Indian textile industry should grab the space left by China and admitted that the problem what the industry faces today due to COVID-19 will be over soon. 

“Government has taken lot of initiatives to support the industry and the government has even changed the definition of MSME and extended support to MSME units, added Rashi. 

“The structural issues on raw material will be addressed very soon. But, it is for the industry to utilise the opportunities, diversify, innovate, scale-up and build global brands.” 

The textile commissioner suggested that despite all the odds due to COVID-19 and other challenges, the industry should keep working and should know how to manage the operation with the crisis. 

“With our resources, the government would be a party to assist the industry. It is hoped that combed efforts will yield the results,” concluded Rashi. 

The 61st Annual General Meeting of SIMA followed the virtual conference and was held at SIMA Conference Hall, Coimbatore. Immediately after the 61st AGM, the new members of committee at its first meeting unanimously re-elected Ashwin Chandran, chairman & managing director, Precot Meridien Limited, Coimbatore as the chairman of SIMA for the year 2020-21. 

SIMA established in the year 1933 by R K Shanmugam Chetty, the first finance minister of independent India, has been representing the entire textiles and clothing value chain right from its inception. The Association has been closely partnering not only with state governments in South India, but more so with the central government especially the ministry of textiles in all the policy making bodies and playing a pivotal role for the development of the textiles & clothing in the country. It is also closely associated with the office of the textile commissioner for decades.

Fibre2Fashion News Desk (PC)