The cotton textile industry in southern India has hailed textile minister Smriti Irani for announcing unique terms and conditions for procuring cotton from Cotton Corporation of India for the benefit of MSME textile units.
Under the new terms and conditions for fully pressed bales of CCI facilitates, the registered MSME textile units can procure cotton by paying only 10% deposit money as against 20%, which was applicable only for the sale quantity of 30,000 bales and above, chairman of Southern India Mills’ Association (SIMA), Senthilkumar said in a statement.
The deposit money up to 2,999 bales is only 15%, which would greatly help the units that are starving for working capital funds in the post-demonetisation regime, he said.
Earlier there was a difference in the free period, ranging from 30-75 days and 75 days free period was available for procurement of 15,000 bales and above, depriving MSME textile the benefit, he said, adding that the free period now has been made uniform and fixed at 45 days, which would again help actual users and the MSME units.
Senthilkumar said the industry requested CCI to opt for coastal movement of bales between Gujarat and Tamil Nadu that would again yield considerable savings for mills.
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He said SIMA has finalised the rates with Shreyas Relay Systems for the entire cotton season 2016-17 that is cheaper by 10-25% when compared to lorry freight. The predominantly cotton based Indian textile industry has been facing repeated recessions since 2008 due to high volatility in cotton prices.