 Hello and welcome to NewsClick. The spinning mills in Tamil Nadu are going through a large crisis. The industry had even resorted to a strike to reiterate the demands to the state government and the union government. To discuss more about the challenges faced by the industry, the lack of order and the subsequent impact on the industry, we have with us Dr. Venkta Chalam, the chief advisor and the founder of the Tamil Nadu spinning mills Welcome sir. Sir, to begin with, what is the role of the spinning mills in the excel industry and what are the serious issues you are facing right now? Spinning mills are in the value chain of the textile industry. Spinning mills are the fundamentals. They are converting the cotton into yarn and the yarn shows what we call the spun. The spun yarn is being marketed for various requirements of making it into handmade garments, home textiles, made-ups and a lot of other value chains of the industries are following. This is the main raw material and it goes through various processes in every area like processing, dyeing, compacting and there are tailoring. So, this is the main mother industry that is feeding the yarn to various requirements of the society. Thereby, depending upon the requirements of the society, the yarn is being made into various products and finally, it goes to the consumer's requirement. So, this is the capital intensive industry and also a power intensive industry where we employ heavy labor forces and also we CAPEX involved in the spinning industry is too high when compared to the other value chains of the textile industry. So, that way we are capital incentive both and also in the labor intensive side also we are incurring even the heavy expenses and investments on the spinning mills. So, we convert the cotton what we receive from the field and ginning factory into quality yarn and we supply it to the requiring industry according to their specifications and requirements. We are producing yarn for all types of other textile value products which will be converted according to the consumer needs and according to the country's needs wherever it is getting exported. So, this is the role of the spinning mills. Spinning mills even had to strike work for the past several days. So, what is the recent behind the strike and what are the setbacks you are facing right now due to the lack of orders from India and others other part of the country? As far as the domestic situation is concerned we do not feel much troubles. So, what happened is depending upon the entire world is depending upon the India and other certain countries for their clothing needs. So, most of the industries in India they are doing they are set up their business in such a manner that they would be 100% export oriented or otherwise to a major extent they will be diverting the product only to the foreign countries through export methods. So, if some 40% is reserved for the domestic needs, another 60% will go only for the export needs. There are no big spinning mills in years. There are no big spinning mills in European countries like that because such kind of large labour force and power for them is difficult to manage and they are running it through the third world countries. So, most of the spinning mills are set up here in India where with an objective of making exports to happen and few of them will also supply their products only for the domestic needs. While there are no much differences in the domestic demands, the entire international demand has come down. So, we are unable to make our product exported when compared to the figures of 2021-22. 2022-23 was only the exports have happened only 50% and another 50% has completely dropped. So, this 50% is also being shared by other nations like Bangladesh, Vietnam, China and wherever the textile concentration is there. Because of the free trade agreements, what we call this FTA, some of the countries are advantageous there in India in quoting their price to foreign countries. So, accordingly, they get the orders to show immediately and Indian textile products are a little bit slowly marked except for the quality and the timely dispatch outputs. India has lesser advantages in exports. So, the product power is too high, the labor wages are too high in India and the processing cost and everything is high in India. It is almost complete with Bangladesh is very difficult to wear, the power cost is low, their labor cost is also low, the government is providing a lot of incentives for such industries. Here, there is no incentive available for this business in India or even on the other textile industries in India except there are small benefits announced by the government of India. So, because of the demand that is going down slowly, there is a demand resistance in the recent times and when the yarn is not getting marketed over there in any of the areas, yarn directly as yarn exports will also go, that is come down. So, the yarn after conversion into the demand government or fabric or otherwise like a bread linens or like a home textiles or made-ups like that, that demand has also come down. So, nobody is buying the products mostly from India. So, that is because we are also suffering. The spinning mills in Tamil Nadu are very large around 48 to 50% of the spinning mills in India is located in Tamil Nadu. So, what is the impact of this on the industry primarily and on the people who depend on the spinning mills for employment? So, what happened after the COVID-19 period which we experienced during 2020? There was a demand surge happen immediately. All the international countries were bouncing upon India to buy the products from India to fill up their supermarkets and all. And so, we earned a little profit during the period from 2020 to somewhere up to somewhere around 6 to 8 months, we earned good profits also. Because of that profit, even though losses are happening nowadays, we are able to manage everything till this month. But beyond July, I think that no spinning mill will be able to stop its closing for any reason. Once a spinning mill is stopped, it will have a varied effect on every stratum of the society. More particularly, the labour force will have to face lay-up or otherwise they have to go. Their earnings will be completely stopped. And coming to the government area, all the GSTs we are paying on fabric everything, that revenue will go will not happen to the government. What we pay, power charges to electricity board, that will immediately stop. So, either way, the entire trading activity comes to a halt. Both the government and both central and state government and also the employees dependent on such industries and also the spinning mill management which are which are borne heavy loans from the banks and all will become NPA. So, that will create a great socio-economic crisis. Unless otherwise, the things are addressed right at this is sprouted in spite of our alarming and also alarming representations, even to various ministries, they're both in government, both the government levels. So, otherwise the spinning industries will, if they once they are made to NPA, they came to bringing back to normal status is very difficult. They will all leave the industry and they will close down. And whatever loans, whatever infrastructure they are availed and pledged with the banks, the banks will take away. So, this is not a good sign for the economy in India. So, that the entire economic conditions will go completely to a different level. And the social impact of it will also by yearnings lost by the employees of around 20 lakh people, 2 million people, weeks, definitely they cannot find a job since very so immediately. So, that will also create socio-economic issues in the society. So, this is how the address unless the governments come forward to address the plates of the spinning bills, definitely it will affect the entire startup, all societies like banks, electricity boards, governmental revenue, GST, income tax. So, in every manner it will be get up. What are the demands of the industry to the union government and state government? You listed a lot of setbacks and the union government told me we recommended to abolish the 11% import duty imposed on the cotton imports. So, that is one of the major demands. So, here in India, the arrival of cotton is slowly, slowly coming down. So, I think that by another one month, there will be no cotton available in India to buy the spinning mills to operate their spinning activities. So, then the cotton is becoming scarce in India, definitely they have to buy the cotton only from the available foreign countries. So, this 11% import duty would be a constraint for them. So, our request is to abolish the 11% import duty imposed on cotton. So, they have to allow free imports as it was being done before 2021. It was introduced in 2021 only, then it continued for some time and thereafter they stopped it for a temporary period. Then it was reintroduced from 1st November 2020 to 200. So, we want to remove the import duty on cotton, totally removed. And the second thing is since we guys already, we have dialed almost for 18 months and all, all our working capital has gone out. So, naturally it is for the banks for their own interest to provide restructuring facility for all these spinning mills to restructure their loans and by providing a policy which may enable them for quick financing recovery. And this is the time the banks would come forward for the restructuring spinning mills. Accordingly, a restructuring policy has to be announced and all willing spinning mills which want to avail the restructuring policy with moratorium, low interest and all other parameters that should be introduced as we are the extended value chain of the agricultural operations from cotton to cotton yarn. So, naturally our interest rates should be kept at par with the nabad rate which is extended to the agricultural series. So, these are our main demands made before the government of India. Coming to the government of Tamil Nadu, we want the power tariff increased in September 2022 to be withdrawn immediately till the industry comes to a normal position and we want all the charges increased should be again bound up and it should be kept prior to N9 2020 to levels. And coming to the renewable energy area, the networking charges that they are imposing on the solar power plants which are set up at our rooftops and all, it should be immediately withdrawn and we should be allowed to make our own energy on which we have invested our money and D&EB has nothing to collect and no rationale behind it in collecting networking charges that should be immediately the system of collection of networking charges should be dispensed with. Coming to the other wind energy areas, they should allow the wind energy generator that is windmills to operate as usual normally and we want our energy to be adjusted against our consumption and accordingly, as per the agreements we had with the Tangit Co, they should allow us to comply with the conditions of the agreement without making us to find condemnations and creating a scene about the behaviors of the Tangit Co officials and all and on the labor front of it. So, since the whole industry is struggling for survival, fixing a minimum wages at this stage when the employees of the spinning mills is not the correct time to say and therefore, the government should draw the functions of the minimum wages committee constituted and let the committee does its operations once the spinning mills are coming to a normal situation. So, just to define it, they can define it. This is the financial power side and labor side demands what we have made it to the both government of Tamil Nadu as well as to the government of India. We have already explained to the government all our problems and we still believe that our problems will be addressed properly in a timely manner so that every day we are losing heavy amounts of money and how long we can withstand these losses is a big problem. So, unless the government comes and supports it, it is going to be a big tragedy for the spinning mills not only for the spinning mills, those employed in the spinning mills also it is going to be a tragedy. Vans will go almost into a big problem and also the government will also lose all its revenue by way of taxes and other things. So, in every segment of the society is getting unnecessarily disturbed. It is for the government to be a policy major to come forward to address these issues on a bar footing area or otherwise. So, it will have its own impact as I thank you sir for joining us. Thank you. Thank you for the newsletter team for having provided an opportunity to win to my grievances in a larger public and thanks a lot and let us wait for the best things to happen. Thank you so much.