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The Southern India Mills’ Association

Committed to Foster the Growth of the Textile Industry

Textile industry wants govt. to relax cabotage rule

It will reduce the shipping costs of cotton, says SIMA
The textile industry in the south expects the Union government to soon come out with relaxation of cabotage rules for movement of cotton from Gujarat to Tamil Nadu by sea.
This is one of the long-pending demands of the industry here to bring down the transport cost of cotton.
Coastal movement
In a recent representation to the Union government, the Southern India Mills’ Association (SIMA) said the Ministry of Shipping had taken several steps to enable coastal movement of cotton from Gujarat to Tamil Nadu.
Textile processing facilities are spread across clusters in different States and hence, transport cost is the key to determining the cost competitiveness of the industry.
“Against this background, we request you to kindly relax the cabotage rule in respect of cotton transport from either Mundra or Pipav Ports to Thoothukudi, Kochi, Chennai and Krishnapatnam Ports,” the association said.
The southern States account for almost 60% of spinning capacity in the country.
However, substantial volume of raw material —cotton — comes from Gujarat and Maharashtra. The industry sees scope for 50% reduction in transport cost if the cotton is moved by ship instead of lorries as done now.
“Every year, mills in Tamil Nadu buy 60 lakh to 70 lakh bales of cotton from Gujarat,” said P. Nataraj, chairman, SIMA.
“This cotton (Shankar 6 variety) is popular for use in hosiery items,” Mr. Nataraj added.
It is learnt that the Centre plans to come out with relaxation of cabotage rules for certain agricultural commodities. It should include cotton too for the benefit of cotton farmers and the textile industry, Mr. Nataraj said.
About 10 lakh bales of cotton are being moved by ships from one domestic port to another for the last couple of years in Indian flag vessel. Relaxation of the rule will enable several foreign flag vessels to move cotton from one Indian port to another at competitive prices, according to industry sources here.