Rising cotton price: Stalin writes to PM seeking specific measures to aid textile industry

All spinning mills should be made to declare their stocks, the CM says in his letter

With the cotton and yarn prices going up, affecting the textile industry in Tamil Nadu, Chief Minister M.K. Stalin has sought Prime Minister Narendra Modi's intervention to improve the situation.

As an immediate measure, stock declaration for cotton and yarn may be made mandatory for all spinning mills so that ginners and cotton traders can obtain actual data on their availability, Mr. Stalin said in his letter to the Prime Minister.

Though the Union government had waived import duty on cotton till September 30 this year, it would take more than three months for the consignment to reach Indian ports after signing of the contract. Effectively import duty waiver would be available only up to June 30, he said.

"Therefore, the Union government may issue suitable clarifications that waiver of import duty will be available for all contracts entered up to September 30," Mr. Stalin requested. The cash credit limit of the spinning mills to purchase cotton might be extended up to eight months in a year.

"Currently, banks provide a cash credit limit to the spinning mills for the purchase of cotton only for three months while the cotton availability with the farmers extends up to four months and thereafter, it is available in the market for another four months," he pointed out.

Similarly, margin money sought by the banks at 25% of purchase value might be reduced to 10% since banks were calculating the purchase stock value at lesser rates than the actual purchase/market rates, Mr. Stalin said.

The Chief Minister also recalled having taken up the issues facing the textile industry with Union Finance Minister Nirmala Sitharaman and Union Minister for Textiles Piyush Goyal. The Union government took note of the situation and the State’s request and notified the withdrawal of import duty levied on cotton, he acknowledged.