SIMA seeks debt restructuring scheme for textile SMEs

Southern India Mills' Association (SIMA) has urged the Centre to introduce a debt restructuring scheme for SMEs in the textile sector, considering their vulnerability.
In a memorandum submitted to Commerce Minister Nirmala Sitharaman here recently, SIMA chairman M Senthil Kumar claimed that the textile industry, particularly the spinning sector, is going through a rough patch.
In the absence of profits, several hundred spinning mills are finding it difficult to service their debts.
The large-scale units have facility of corporate debt restructuring that give breathing space to financially stressed units once the lenders are convinced of their viability, he said.
Such facility was not available for SMEs (the small and medium enterprises) and with the revised NPA norms, both banks and the spinning sector are facing huge problems, he added.

To resolve the problem, SIMA has asked for introduction of a debt restructuring scheme for SMEs, which were highly vulnerable, Kumar informed.

India has to necessarily export at least 150 million kgs of cotton yarn per month due to continued fall in demand from China, he said.
Also, it has to market the yarn in other countries for which MEIS (Merchandise Exports from India Scheme) benefit is essential to meet additional transport cost, he added.
Considering this, the government should extend the 3 per cent export incentive extended to other textile exports for cotton yarn, to revive the export performance, Kumar said.