Textile industry in southern India suffers blow, Bangladesh textile mills find their own way out
Starting from April 1, tariffs in the southern Indian state of Tamil Nadu have increased by 40%, which has dealt a major blow to cotton consumption in southern India. Due to the sharp increase in tax rates, local textile mills have increased yarn prices by 6% to offset the increased electricity costs. The number of spindles of textile mills in this region accounts for 47% of India’s total, and its output accounts for 1/3 of India’s total. The number of textile workers exceeds 5 million. The Southern India Textile Mills Association said that the state’s textile industry is currently unable to attract any external investment. The textile industry has become uncompetitive and more than 2,000 factories are expected to close down due to high production costs.
India’s ban on cotton exports has put Bangladeshi textile mills in an embarrassing situation, forcing them to purchase domestic commercial stocks of cotton. After India banned exports, Bangladesh also made inquiries for other varieties of foreign cotton, but actual transactions were sparse. At present, the domestic yarn price in Bangladesh is weak, and most factories buy whatever they need. There are reports that the government is considering purchasing 300,000-500,000 tons of Indian cotton each year, but there has been no progress yet on this matter. If Indian yarn prices continue to remain weak, Bangladeshi cloth mills may import more Indian cotton yarn. In addition, Bangladesh’s garment exports continue to decline. Increased labor costs, rising oil prices, high loan interest rates, and the energy crisis have all weakened the competitiveness of the country’s garment industry. Still, some apparel manufacturers are making progress in exploring new markets.
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