The delay in disbursement in state-level levies, huge backlog in Technology Upgradation Fund Scheme (TUFS) and high interest rate have not only stalled expansion and modernisation of the textile & garment industry, but has also affected cotton growers and textile machinery manufacturers.
According to industry sources, prices of new cotton crop in Gujarat, Punjab, Madhya Pradesh and Andhra Pradesh have slipped between 7 and 10% due to poor order position from the garment industry. This is ringing alarm bells for cotton growers who were expecting a bumper crop this year. The production of cotton is expected to go up from 280 bales this year, to 310 bales next year.
Textile machinery manufacturers, especially in small
and medium enterprises (SMEs), which are on the verge of closure, have also witnessed the shock.
According to South India Cotton Association, while the prices of cotton from Gujarat have gone down from Rs 20,500 in September, to Rs 19,000, crops from Punjab, MP and AP were down from Rs 18, 760 to Rs 17,623, from 19,800 to Rs 19,000 and from Rs 22,000 to Rs 21,000 per candy, respectively, in the same period.
?This is a very grim picture for a country which is expected to export around 20% more raw cotton,? say Confederation of Indian Textile Industry secretary general DK Nair. He expressed apprehension that the domestic textile industry was going in reverse gear, going back to days when the country was considered only a source of raw material.