Gujarat's smaller spinning mills in trouble

In spite of extensive support from the state government, Gujarat’s small and medium spinning mills are on the verge of closure. While other segments in the textile industry value chain may be experiencing a turnaround, spinning is still reeling under global recessionary trends. 

“Spinning mills had been virtually non-existent in Gujarat. Only Ahmedabad had some presence in spinning mills. But lately we have seen closures due to the international situation,” said Mahendra Kajiwal, former president of the South Gujarat Chamber of Commerce and Industries. 

According to P R Roy, an Ahmedabad-based textile consultant, “the Gujarat government has been announcing some benefits and incentives for setting up more spinning mills. But the situation is altogether contrary. Units in Gujarat are closing down and opting for sourcing from other states.” 

While the Central government has already announced a four per cent subsidy for the spinning sector under the Technology Upgradation Fund Scheme (TUFS), the Gujarat government had also offered other incentives to encourage SMEs in setting up spinning mills. 

The Gujarat government has announced special benefits for the spinning industry. Unlike players in other segments of the textile industry value chain, which will receive a maximum interest subsidy of Rs 25 lakh per annum for setting up new units, SMEs planning to set up spinning mills will receive subsidies worth Rs 40 lakh, with a total cap of Rs two crore in five years.