The textile industry in South India wants a relaxation in cabotage rules for movement of cotton from Gujarat to Tamil Nadu by sea. It’s believed this will bring down the transport cost of cotton. Cabotage refers to the practice of imposing restrictions for movement of domestic cargo by foreign flag vessels.

The southern states account for almost 60 per cent of the spinning capacity in the country. However, a substantial volume of raw material —cotton — comes from Gujarat and Maharashtra. The industry sees scope for a 50 per cent reduction in transport cost if the cotton is moved by ship instead of lorries as done now.

About 10 lakh bales of cotton are being moved by ships from one domestic port to another for the last couple of years in Indian flag vessels. Relaxation of the rule will enable several foreign flag vessels to move cotton from one Indian port to another at competitive prices.

Every year, mills in Tamil Nadu buy 60 lakh bales to 70 lakh bales of cotton from Gujarat. This cotton (Shankar 6 variety) is popular for use in hosiery items. Textile processing facilities are spread across clusters in different states and hence transport cost is key to determining the cost competitiveness of the industry.