Suggesting the need for export interest subvention for spinning textile sector, credit rating agency Crisil has warned of a major crisis to farming community due to rising NPA levels in textile, falling EBITDA, Net Margin and fall in credit rating. Crisil’s interim report, prepared based on the request of Texpreneurs Forum and a copy of which was presented to the Commerce Minister Nirmala Sitharaman, further stated that if the same trend continues, in next stage, fall of spinning sector will lead to a major crisis to farming community, because every year cotton output is increasing in our country.

Commenting on a governmental view, the report says that government was of the opinion that spinning was well organised and well grown and self-sustainable, because of 2011-12 historic losses due to cotton volatility and subsequent development in China in the last two years and also new capacity addition in spinning sector, created big trouble in finances of ‘stand alone spinning mills.’

Cotton as commodity only has limited export potential, because only 10 countries will import cotton, the report said in case of yarn, export potential was more as it can be exported to more than 60 countries, indicating that cotton farming is also directly linked with the health of spinning industry.