The textile industry, reeling under a severe financial crunch, has suffered another massive blow due to the lockout declared by the Centre to check the spread of COVID-19.
The textile industry is heavily dependent on orders for yarn from the USA and Europe and the lockout of 120 spinning mills from March 23 has hit the sector hard.
“As a result, the industry will not be able to recover at least for the next one to two years. Yarn orders are being cancelled by corporate buyers who are dependent on orders from the US and Europe. If US doesn’t recover fast, it will lead to the closure of a lot of textile mills in our State and also across the country,” said secretary of AP Textile Mills’ Association Lanka Raghurami Reddy.
Payments stopped
The textile sector has been facing losses as payments have been stopped by buyers due to the coronavirus impact, and the industry is facing severe pressure from banks. As a result more mills could be declared as Non-Performing Assets.
The APTMA has requested Chief Minister Y.S. Jagan Mohan Reddy to understand the crisis situation and help the units overcome it by announcing immediate relief measures like releasing of outstanding subsidies which were not paid by the previous government for the last four years, deferment of payment of power bills to A.P. DISCOMS for three months without interest and exemption from payment of minimum consumption units and minimum MD charges.
Further, Mr. Reddy urged the CM to recommend to the Union government for waiver of interest payment on all the loans of textile units, including CC limits for six months and moratorium of two years for the existing term loans.
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