From operating a mill 24x7, textile mills of the Northern India Textile Mills’ Association (NITMA) may keep their units shut once a week and cut back production. Excess spinning capacity in the country and poor demand for yarn from overseas markets has led to the accumulation of stocks and poor liquidity. This is the reason for the weekly shutdown by textile mills.

President of NITMA, Sharad Jaipuria said that new investments in spinning were happening in states such as Madhya Pradesh, Gujarat, Maharashtra, Rajasthan, Andhra Pradesh and Telengana. This was because of their new Textile Policy, which offered loads of incentives and sops thus adding more than required capacity in the country. He added that Tamil Nadu too would be announcing a new Textile Policy soon.

Meanwhile, China, had cut-down imports in the past few months, so the situation had worsened, which in turn led to an accumulation of yarn stocks in Indian spinning mills. Senior Vice President, NITMA, H S Cheema also felt that the spinning industry was in a crisis and the situation was worsening and spinners were incurring losses. Thus, they were looking at several options to reduce their daily production.

Moreover, the TUFS reimbursements were pending for cleared cases from the July-September 2014 quarter. This only added to the woes of the industry.