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The South India Textile Mills Association Urges The Ministry Of Finance To Proceed With Debt Restructuring Immediately.

2011/12/13 9:10:00 30

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India Textile Debt Restructuring Programme

The textile and garment industry in India is the largest and most labor intensive industry in the country, employing 35 million people directly and employing 45 million indirectly, mainly women and rural population.

In 2010-11, the turnover of textile and garment industry was about US $77 billion, including exports of US $24 billion.

As the textile industry is a net export industry,

Relevant

The export policy and global market demand have a significant impact on the textile industry.

The price of raw materials in the domestic market is affected by the extremely unstable trend in the global market.

This highly leveraged industry has 78% debt in its capital structure.

The industry also needs huge working capital to ensure that cotton is needed annually in 5 months, and cotton is a seasonal commodity.

The government's policy on cotton exports and cotton yarn exports at the end of 2010 greatly affected cotton prices and yarn prices, which led to the scarcity of goods in India's domestic and global markets.

As a result, prices are very unstable. Eventually, the textile industry only loses 110 billion rupees working capital in the first quarter of the current financial year.

At the same time, the EU economic crisis, more than 1000 printing and dyeing factories in Tamil Nadu closed down, the capacity utilization rate decreased by 25%, resulting in cash losses for the national textile mills, especially in Tamil Nadu, which accounted for 1/3 of the national textile industry.

More than one million people are unemployed due to the reduction of industrial chain.

In a press release, Mr.S.Dinakaran, President of the SIMA, said that in the past 10 years, the textile industry has invested more than 83% of the 226 listed textile companies in the country in accordance with the technology pformation fund plan.

enterprise

The efficiency was poor, and the 127 companies suffered a net loss in the first half of 2011-12 years.

Mr.Dinakaran has said that the current crisis is the most serious crisis in history, far larger than the global recession in 2008-09, when the government announced its rescue plan.

SIMA said the current textile industry

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The crisis has surpassed the controllable range of private textile mills. Therefore, this abnormal loss should be regarded as a special loss for banks.

He pointed out the seriousness of the economic recession. He has repeatedly proposed to the government, the Reserve Bank of India and the India Association of banks for financial planning since July 2011.