Home / Knowledge / News / Textiles / CITI urges govt to defuse grave crisis; relief package sought
CITI urges govt to defuse grave crisis; relief package sought
Jul '11
Textile industry has sought urgent measures from the government to defuse the grave crisis being faced by it on account of various domestic and international circumstances.

“Textile industry is undergoing an unprecedented rough trajectory marked by crash in prices of yarn, drastic demand erosion in domestic and international markets juxtaposed with withdrawal of export incentives that helped its price competitiveness, imposition of steep excise duty of 10 per cent on branded garments and made ups and arbitrariness in imposing quantitative restrictions on export of yarn,” says Mr. Shishir Jaipuria, Chairman, Confederation of Indian Textile Industry (CITI).

CITI Chairman observed that the impact of these avoidable measures has resulted in a loss of Rs 11,000 crore to the cotton yarn sector. This has eroded the working capital of the units significantly and many of the units are not able to meet their obligations for repayment of loans and interest. In order to avoid a large number of units becoming Non Performing Assets (NPAs) and subsequently leading to closures in a matter of months, he urged that the government should announce a relief package without any loss of time.

Detailing the type of support that the industry is expecting from the government, Mr. Shishir Jaipuria said that DEPB and drawback on exports of cotton yarn should be restored immediately with effect from the dates of their discontinuance. Also, he urged restoration of interest subvention of 4.5 percent on export of textiles and clothing.

To stimulate the dithering consumer demand, he wanted excise duty of 10 percent imposed on the branded garments and clothing in the last Budget to be withdrawn. Moratorium of additional two years on repayment of all loans and interest to be allowed including TUFS loans for all units in textiles and clothing industry and reduction of margin money for purchases of cotton to 10 percent are the other two relief measures suggested by him.

Dissecting the steps that have led to the present crisis in the textile industry, Mr. S.P. Oswal, Chairman and Managing Director, Vardhman Textiles Ltd. said in April this year world cotton prices crashed all of a sudden in tandem with the global commodity prices, after reaching unprecedented high levels.

For instance, domestic cotton prices (Shankar- 6) increased from Rs 30,000 per candy in September 2010 to Rs 63,000 per candy during February – March 2011. It crashed to Rs 45,000 per candy in April 2011 and to Rs 38,000 per candy by the end of June 2011. Since mills stock cotton for 2-3 months, most of them had bought cotton at high prices and are currently stuck with high cost cotton. They have lost over Rs 15,000 per candy on about 65 lakh bales in cotton stock. This would amount to a total estimated loss of Rs 6000 crore for the industry.

Coupled with drastic reduction in the prices of manmade fibres, which has incurred a loss of Rs 500 crore to the spinners, the industry losses are peaking to Rs 6500 crore approximately.

Must ReadView All

Courtesy: UPM Raflatac

Apparel/Garments | On 17th Jan 2017

New residue free textile label adhesive from UPM Raflatac

Producer of self adhesive label materials UPM Raflatac, has...

Courtesy: Authentic Brands Group

Apparel/Garments | On 17th Jan 2017

Teen retailer Aéropostale reopens 500 stores in US

Teen apparel retailer Aéropostale has reopened 500 stores in the US,...

Courtesy: Centric Software

Information Technology | On 17th Jan 2017

Centric releases version 6.0 of PLM solution

Centric Software, the leading PLM solution for fashion, retail,...

Interviews View All

Yash Maniyar
Rekha Maniyar

Indian fashion market is growing at a staggering rate

Claudia Kersten
Global Organic Textile Standard

‘GOTS is a very efficient supply chain management tool, especially for...

Marazban F Velati
Sutlej Textiles & Industries limited

No training can be effective till the candidate believes in it.

Marcel Alberts

Coating at a fibre level is a practice not usually seen in the...

Ashok Desai
Bombay Textile Research Association

Bombay Textile Research Association (BTRA) is a leading name in textile...

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Sonam & Paras Modi

Sonam and Paras Modi's Sva Couture is synonymous with head-turning...

Tony Ward
Tony Ward

"You have to truly understand what your client wants, know her needs, what ...

Silvia Venturini Fendi
Fendi s.r.l

"Yes, my confidence and positive attitude are my strengths and should be...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


Letter To Editor

(Max. 8000 char.)

Search Companies

January 2017

January 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.


Browse Our Archives


Subscribe today and get the latest News update in your mail box.
Advanced Search