Ease of Doing Business for MSMEs: Prices for 40s violet label cotton grey yarn have jumped from Rs 242 per kg in November 2019 and Rs 244 per kg in November last year to Rs 374 per kg in November this year, as per the Tirupur Exporters’ Association.
Ease of Doing Business for MSMEs: Protesting against the increase in yarn prices, the Federation of Tirupur Apparel Cluster, which includes knitwear manufactures and exporters, will observe the one-day closure of all businesses and hunger strike on November 26, 2021. “Seeking a ban on cotton exports and to bring restriction on yarn export, Tirupur cluster of knitwear manufactures and exporters along with trade unions, political parties, and the entire traders of the various genres called for a one-day closure of all businesses and hunger strike,” the notice by the federation read.
Confirming the business closure and hunger strike, Tirupur Exporters’ Association (TEA) Executive Secretary S. Sakthivel told Financial Express Online, “The government had told a few days back that it would not intervene in this matter adding that the cotton price rise was benefitting farmers. However, the tussle between cotton traders and yarn traders should not come to impact the prices. Almost 90 per cent of Tirupur exporters are MSMEs. Hence, they are not in a position to absorb the price rise of yarn. If anything happens to them, the whole value chain gets affected in Tirupur.”
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According to the association, prices for 40s violet label cotton grey yarn have jumped from Rs 242 per kg in November 2019 and Rs 244 per kg in November last year to Rs 374 per kg in November this year. According to Sakthivel, domestic businesses in Tirupur provide direct employment to 6 lakh workers and indirect employment to 2 lakh workers.
Commerce Minister Piyush Goyal earlier last week had said that the pricing issue of cotton bales and yarn for the industry should not be allowed in any way to impact the better prices which farmers are getting. “Manufacturing sectors should not depend on the government support for growth. Too much dependence of state support is not healthy for the robust growth of the sector,” Goyal had said in a meeting with textile industry players, as per a statement by the Textiles Ministry.
Importantly, on Monday, the government had also notified replacing the inverted tax structure on man-made fibre (MMF) textiles to a uniform rate of 12 per cent across MMF, MMF yarn, MMF fabrics and apparel instead of 18 per cent, 12 per cent, and 5 per cent respectively. To be effective from January 1, 2022, the move “will help the MMF segment grow and emerge as a big job provider in the country,” the government said in a statement.
However, traders’ body Confederation of All India Traders (CAIT) on Thursday said that increasing the GST on clothes and footwear from 5 per cent would impact traders. As a result, textile associations will launch a nationwide agitation, it said. “Without having any understanding of the stages of the textile industry, such a harsh decision will be a regressive step. The government’s notification to increase the rate of GST on basic items like textiles and footwear from 5 per cent to 12 per cent is being opposed all over the country. CAIT has decided to launch a mega agitation across the country against such arbitrariness,” a statement by CAIT had said.