September 4, 2019
Following the slowdown in automobile and biscuit manufacturing industries, spinning mills across India are now reeling under pressure. In Tamil Nadu, at least 35% of the spinning mills have shut down or laid off employees.
The economic slowdown and current recessionary trends sweeping across industries in the country seem to have found their next victim in textile spinning mills across India. The sector is witnessing its worst ever slowdown in decades and it is estimated that at least 35 per cent of the spinning mills in Tamil Nadu alone have already shut down or laid off employees.
The current market conditions, which have already seen the automobile and biscuit manufacturing industries reeling under the stress, have created massive repercussions in the textiles sector too. Across India, spinning mills are seeing a decline in jobs and lay-offs, which according to reports, is rare and the worst since decades. Nearly 605 spinning mills across India have shut down, laying off at least 1,20,000 employees due to slowdown in production and declining consumer demand.
Mr M Jayabal, president of the Tamil Nadu Open End Spinning Mill Association, said 35 per cent of the spinning mills have already downed their shutters, forcing employees out of work. There is already a 30 per cent labour shortage in the sector, he said. The sector has been witnessing labour shortage for the past two years due to poor consumer demand and exports, but this current slowdown has hit badly.
Pleas for help have gone unheard
The industries raised the matter with the Centre seeking remedial measures to shore up cotton yarn exports which had fallen by 34.6% to $696 million in June this year, compared to $1.06 billion just one year ago. But they say their pleas fell on deaf ears. Interest rates imposed on cotton yarn is high when compared to other countries, which is another drawback for the sector and its growth. Sources said the industry also urged the Government to levy anti-dumping duty, which not only would have provides a level-playing field to domestic manufacturers but also ensured that no cheap products were being imported.
When asked about these demands, M Jayabal added that they have also asked the Government to lower the GST rate as cotton yarn import interest rates are higher when compared to countries like Bangladesh , China and Sri Lanka.
If the slowdown continues without any measures to halt it, the situation will spin out of control, hampering growth and affecting the textiles sector, which is country’s second largest employer.