Over 300 textile mills shut in Tamil Nadu in last few years, says report

Over 300 textile mills went out of operation in Tamil Nadu between 2021-22 and 2023-24, according to the Annual Survey of Industries.

The data released by the Union Ministry of Textiles earlier this month showed that in 2021-22, Tamil Nadu had 2,773 textile mills and 2,121 of these were in operation. In 2023-24, the number went down to 2,455 with just 1,672 mills in operation. Spokesperson of a leading textile association said another 300 mills were closed in the last two years.

The data shows there were 11,460 textile and apparel manufacturers in 2021-22 and 8,771 were in operation. In 2023-24, there were 11,467 textile and apparel manufacturers and just 8,503 were in operation. This included textile mills, weaving, processing, and garment making units.

According to industry representatives, almost two lakh powerlooms had been scrapped in the last couple of years.

A host of factors have hit the textile industry in the State, they say. Most of the textile industries are in the micro, small and medium enterprises (MSME) segment. Be it raw material, bank interest rates, or power cost, the MSMEs are at a disadvantage. So, a large number of small-scale textile mills have shut shop, said South India Spinning Mills Association (SISPA) secretary Jagadish Chandran.

“Tamil Nadu textile industry is finding it increasingly difficult to remain cost-competitive compared with other States. For instance, the power cost for the mills in Tamil Nadu is ₹ 9.25 a unit. This is at least ₹1 more compared with competing States. Only those textile units that have invested in wind and solar energy have survived, as Tamil Nadu has the most flexible renewable energy policy. The annual increase of power cost should stop,” said the spokesperson.

Textile mills lose heavily on the raw material front. Be it cotton, polyester, or viscose, the mills buy raw material from the north and incur transportation cost. The import duty on cotton and quality control orders that are now withdrawn had impacted the industry.

The processing units incur high costs because of zero liquid discharge, while States such as Gujarat are permitting marine discharge of treated effluent.

While the State government recently come out with an integrated textile policy, it should remove the caps for subsidies, industry representatives said.