The mass closure of dyeing units in Erode and other parts of Tamil Nadu has forced weavers in the state to process fabric in upcountry centers, resulting in high transport costs and increased lead time. The predominantly cotton-based spinning and power loom sectors across the nation have been facing severe recession in the last 18 months due to glut in global market and higher duties imposed on Indian textile products than on products from other textile manufacturing countries.

One solution is for textile manufacturers in Tamil Nadu to focus on future investments only in wet processing and further value addition to sustain the viability of 47 per cent of the spinning capacity and 22 per cent of the power loom capacity in the country.

It is hoped that the reopening of dyeing units in Rajasthan and the recently announced MEIS and IES export benefits for fabrics and other finished goods might improve market conditions in the coming months. Against this background, the Southern India Mills’ Association and the Powerloom Development and Export Promotion Council have decided to join hands to study the fabric market on a continuous basis and give feedback to the spinning and power loom sectors and also to the government.