Published
Dec 12, 2019
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Tamil Nadu textile companies face working capital shortage

Published
Dec 12, 2019

Textile firms in Tamil Nadu are facing a working capital shortage, as manufacturing costs continue to increase, prompting the Indian Texpreneurs Federation (ITF) to contact the Textiles Minister to request help.

Tamil Nadu’s textile businesses are facing a working capital crunch - ReWeave - Facebook


The ITF, which represents 550 Indian mills and garment manufacturers, recently sent a memorandum to Union Minister for Textiles, Smriti Irani, to highlight the challenges the yarn spinning and garment manufacturing industries are currently facing in Tamil Nadu, ET Bureau reported.

The ITF attributed the market slowdown to volatile cotton prices, the Eurozone crisis, and a liquidity-induced extended credit period, in its news release.

“Business demands more money these days, and entrepreneurs have had to extend their credit limit,” said ITF convener Prabhu Damodharan, ET Bureau reported.

“On one side, working capital from banks has eroded and the market is demanding more credit. Unable to work in this system, a large percentage of units facing higher manufacturing costs in terms of raw material, energy, and lower price realisation of their products are in negative cycle now.”

The government has championed the Indian textile industry as a potential driving force for economic growth and promoted increasing production as part of its “Make in India” campaign.

However, an ITF Tamil Nadu survey found that 85% of the 300 surveyed business owners in the state faced liquidity problems with 45% describing those issues as very severe. 

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