Home / Knowledge / News / Textiles / SIMA suggests measures to overcome demonetisation impact
SIMA suggests measures to overcome demonetisation impact
Nov '16
The Southern India Mills' Association (SIMA) has sought certain remedial measures to enable the industry to mitigate the challenges posed by the cash crunch created by demonetisation. SIMA has suggested enhancing the working capital limit by 50 per cent and increasing the existing NPAs period from 90 days to one year among a number of other things.

In a representation sent to the Union textiles minister Smriti Irani, M Senthil Kumar, chairman of SIMA, has stated that 2 per cent MEIS and 3 per cent IES benefits can be extended for cotton yarn exports to enable the industry to boost exports and improve its global competitiveness. The government can increase the moratorium period for repayment of loans up to Rs 1 crore from 2 months to 1 year, considering that the textile industry is under a severe financial crisis and there's a need to prevent textile units from becoming non-performing assets (NPAs).

The representation also states that the government may consider deferring all the tax payments for a period of six months. One year moratorium period could also be given to the cotton farmers for the repayment of loans and interest, with clear instructions to the banks not to adjust the sale proceeds of kapas against their dues. Competition Commission of India (CCI) could also procure kapas at market price to help the farmers.

SIMA has also made a suggestion to reduce interest rate of 12 to 13 per cent by 3 per cent for all the term loans and working capital loan across the value chain to help textile units to sustain their financial viability. Necessary directions can also be given to the banks to enable migrant workers to instantly open accounts by showing any ID proof. This would enable the employer to pay the wages through the bank.

These remedial measures have been suggested by Kumar as the textile retail showrooms and shops across the nation are hit by cash crunch and low sales as the customers are starving for currencies and spending the rationed currency available with them only for emergency purpose. He has stated that the stocks started piling up across the value chain of the textile industry and the textile units are not in a position to collect any receivables and therefore cash flow of the textile industry is seriously affected.  

SIMA chairman has further stated that the cotton price increased by around Rs 2,000 per candy as the cotton arrival to the market came to a grinding halt during the first 10 days after demonetisation and has currently improved to the level of 50 to 60 per cent. It might take at least six months for the textile industry to reach normalcy in its performance.

The withdrawal of around 86 per cent of the currency in circulation has led to severe shortage of funds for regular operations, purchase of raw material, sale of finished goods and the purchase of regular requirements of stores, spares, accessories in the textile industry. (KD)

Fibre2Fashion News Desk – India

Must ReadView All

Sri Lanka reduces VAT on imported fabric to 5%

Textiles | On 24th Sep 2018

Sri Lanka reduces VAT on imported fabric to 5%

Considering the requests made by the stakeholders in the fabric...

E-com firms in India to deduct 1% TCS under GST from Oct 1

Apparel/Garments | On 24th Sep 2018

E-com firms in India to deduct 1% TCS under GST from Oct 1

E-commerce companies in India will have to deduct 1 per cent tax...

Courtesy: Andritz

Textiles | On 24th Sep 2018

'Strength of economy, demographics drive nonwovens demand'

The strength of the economy and demographic trends are the main...

Interviews View All

Dinaz Madhukar, DLF Emporio and DLF Promenade

Dinaz Madhukar
DLF Emporio and DLF Promenade

‘Each event and promotion is planned out keeping in mind the business of...

Nitin Soni, Dolphin Jingwei Machines

Nitin Soni
Dolphin Jingwei Machines

Taxation policies need to be made simpler

Rahul Bhadani, Looksgud

Rahul Bhadani

Navigating through catalogues is a bit hasslesome

Siddhachakra Weaving (Badiya Fashion),

Siddhachakra Weaving (Badiya Fashion)

Ahmedabad-based Siddhachakra Weaving Pvt Ltd was established in 2011 under ...

Shivani Swamy,

Shivani Swamy

The Livinguard Technology is owned by Green Impact Holding AG based in...

Ramez Basmaji,

Ramez Basmaji

Fabusse is a Lebanon-based fashion agency that offers a variety of...

Marcel Alberts, Eurofibers

Marcel Alberts

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

Steve Cole, Xerium Technologies

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Johan Berlin, Investkonsult Sweden AB

Johan Berlin
Investkonsult Sweden AB

Investkonsult Sweden AB are consultants in the nonwoven and absorbent...

Divvya and Nidhhi Gambhir, Walnut

Divvya and Nidhhi Gambhir

<b>Divvya and Nidhhi Gambhir</b> started their career with the launch of...

Ritu Kumar, Label Ritu Kumar

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

Chandani Sahi, By Chandani

Chandani Sahi
By Chandani

By Chandani is a womenswear prêt couture brand with fusion silhouettes by...

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


Leave your Comments

September 2018

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

news category

Related Categories:

Advanced Search