Rajapalayam mills shut down as imports, cotton prices squeeze industry.
The textile industry in Rajapalayam, is facing a crisis. Several spinning mills have been forced to close in recent years, leaving hundreds of workers jobless. This is attributed to a combination of factors, including cheap imported garments flooding the market, high import taxes on cotton, and the failure of the Cotton Corporation of India (CCI) to regulate cotton prices.
One major issue is the easy availability of cheaper garments from countries like China, Vietnam, Bangladesh, Sri Lanka, and Indonesia. This undercuts the competitiveness of domestic mills. The CPI(M) functionary, B Mariappan, argues that the government should have imposed anti-dumping duties to protect the local industry.
Another problem is the volatile pricing of cotton, the primary raw material. The CCI, established to stabilize cotton prices and ensure supply to spinning mills, has been accused of selling cotton to corporates instead, leading to hoarding and price hikes. This price volatility is further amplified by the fact that cotton is the only agricultural product subject to GST (Goods and Services Tax). When cotton prices fall after being purchased at a high rate, mills struggle to sell yarn at a profit due to the embedded GST.
Adding to the woes are high electricity tariffs. Many mills are now operating at reduced capacity due to sluggish demand. This situation is a far cry from the past when workers regularly did overtime to meet production targets.
Industry representatives are urging the government to take action. They propose a zero input tax on cotton and lower interest rates on loans to revive the industry. The job losses have had a ripple effect, forcing many workers to seek alternative employment in construction or farming. Women who had taken loans from self-help groups are particularly impacted as they struggle to repay their debts.
In summary, the Rajapalayam textile industry is in dire need of government support to overcome challenges like cheap imports, unstable cotton prices, and high operational costs.
