The Southern India Mills' Association today called upon Tamil Nadu chief minister Jayalalithaa to announce a comprehensive textile policy to ensure financial viability and competitiveness of existing manufacturing facilities in the state and encourage value addition.
"The state urgently needs a comprehensive policy to sustain viability of huge manufacturing facilities and also attract investments for modernisation and value addition to make Tamil Nadu a global hub for textile manufacturing," SIMA chairman T Rajkumar told reporters here.
Textile policies of other cotton-growing states are stealing a march, he said.
A steep increase in transportation cost is hurting as the industry procured 95 per cent of cotton from other states, Rajkumar said.
Stating that SIMA has been closely working with the government to draft the policy for the entire textile value chain, he said it had already submitted its proposal and had several rounds of discussions with the authorities concerned.
He suggested that the government should consider, among other things, issues like VAT reduction on cotton textiles to 2 per cent from 5 per cent and removal of one per cent market committee cess on cotton and cotton waste.
The government should also set a separate power tariff for the textile industry based on load factor and cost-to-serve basis, he said.
Rajkumar made out a case for various incentives for new investments on the lines of the Apparel and Textile policy of Andhra Pradesh.
Tamil Nadu accounts for one-third of textile manufacturing facilities in India and earns over Rs 60,000 crore as forex earnings annually, Rajkumar said.