“Cotton crop production has been really good this year. Raw material availability has also been unaffected. More than that, Chinese companies are now buying yarn from the Indian market as they have slowly shifted their focus on to making high-value products instead of spinning yarn. So, the market is really encouraging for SMEs,” Thirunavukkarasu said during an exclusive interaction with SupportBiz. As yarn production in Pakistan, one of China's key supplier, continues to drop, Beijing is largely looking at the Indian market for mass purchases of yarn to make towels, T-shirts, jeans and stockings.
While that being said, Thirunavukkarasu did not ignore to highlight the ever-growing concern of insufficient power supply. “The intermittent, long hours of power breakdowns are pushing our production cost to a much higher rate. It also takes a heavy toll on our competitiveness with other states such as Madhya Pradesh, Maharashtra or Gujarat where there is surplus power,” he said. While states like Gujarat offers electricity at Rs 5-6 per unit, mills in Tamil Nadu have to shell out at least Rs 9-10 per unit. Spinning mills in the states also have to bear higher transport charges when compared to other cotton hubs in the country as they source raw materials from up country markets, especially from states such as Madhya Pradesh, Maharashtra, Gujarat.
There are about 800 small and medium and 600 large spinning mills in Tamil Nadu, employing roughly about 14 lakh people directly and indirectly. SISPA, with a member base close to 600, has been demanding an effective policy change in the labour laws as the industry functions purely on labour-driven activities. “A flexible labour law is the need of the hour as we find it hard to build a stable workforce. We have also requested the authorities to bring in a policy whereby SMEs can avail loans below 10 percent interest rates,” Thirunavukkarasu said. The association has also raised its concerns to the government regarding the cotton export norms. It seeks some sort of a restriction on cotton export to ensure adequate availability of cotton for domestic consumption.