Stalin wants PM Modi to scrap import levy on cotton, ban waste cotton exports & rejig ECLGS

Chennai, July 19 (SocialNews.XYZ) Scrapping of import levy on cotton, ban waste cotton exports and restructuring of the Emergency Credit Line Guarantee Scheme (ECLGS) are the three measures needed to help the MSME-led spinning sector in the state, Tamil Nadu Chief Minister M.K.Stalin told Prime Minister Narendra Modi.

Stalin in a letter to Modi said high cotton prices, operational costs and poor demand in domestic/international markets has plunged the spinning sector into a crisis and the industry association has announced production stoppage from July 15 onwards.

The Chief Minister said the repayment of ECLGS has begun which is an additional burden on the spinning mills and increasing their production cost.

"Another significant price differentiator between India and its competitors internationally is the 11 per cent import duty imposed on cotton in India," Stalin added.

Stalin requested Modi that the central government provide financial support for MSMEs in the textile sector under ECLGS by extending the moratorium by one more year.

Existing loans under ECLGS may be restructured, converting them into six-year term loans, and fresh loans may be provided under ECLGS, reducing the regular banking interest rate, Stalin said.

Stalin also said the central government should ban export of waste cotton temporarily to tide over the shortage faced by the Open-End spinners who fall under the micro-enterprises category but contribute to 35 per cent of the yarn production of the country primarily used in low-end fabrics.

He also urged the central government to withdraw the 11 per cent import duty on cotton.

According to Stalin, with 1,500 spinning mills and around 15,00,000 employees, the spinning sector is one of the vital engines of the industrial economy of Tamil Nadu.

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Source: IANS