The Indian textile industry has been passing through one of the worst crises in its history during the last two years, and adding to their woes is the fresh fuel price hike feared to further downsize the existing weak production. The entire industry is unhappy with the hike, where traders have criticized the Government for the new increase, saying the expensive fuel has weakened the prospects for trade and industry growth, governing bodies of the industry like SIMA have strongly protested the hike. An appeal regarding the same has been sent to the Prime Minister by SIMA (The Southern India Mills Association), requesting him to rollback the price hike in the interests of over 91 million jobs in the textile industry and to avoid mass closures of industrial units resulting in severe industrial and social unrest.
Waves of anger swept through the industry, already yearning for the Government’s support as the diesel price hike of Rs. 5 per litre at one stroke came as a rude shock. The diesel price hike would have an implication of Rs. 4 to Rs. 17 per kg in the cost of production of the yarn for the spinning sector which is largely dependent on diesel power generation, apart from substantial increase in the indirect costs like transportation.
India which is already in a disadvantage position in the international market due to high cost of inputs which is to the tune of 20 per cent when compared to countries like Bangladesh will further lose its competitiveness due to this diesel price hike. The industry has already been pleading the Government for several years now to exempt all the fuels meant for captive power generation from fiscal levies till the country becomes self-sufficient on power front. The industry believed, the exemption is essential to sustain the global competitiveness and ensure achieving inclusive growth.
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