Falling demand, strong price competition pushing textile market into crisis

Many believe that two major reasons for erosion of India's global competitiveness are the 11 per cent import duty levied on cotton and high volatility in cotton prices during the last two years

Since last Saturday, around 1,800 of the total 2,200 spinning mills in Tamil Nadu decided to stop production and sale of yarn. The state is home to more than half the country’s 4,000-odd spinning mills. These companies’ key grievance is the lack of policy support as a result of the demand recession in the United States and the European Union (EU) markets that has made their businesses unviable.

The mills have approached the Indian Bank Association (IBA) seeking relief, including an extension of a one-year moratorium on the payment of the principal on loans that spinning mills took during the