Many spinning mills in Andhra Pradesh may have to close down. Mills in the states were operating with 50 per cent capacity earlier but now they have decided to close them due to soaring operational costs. The main reason for this situation is sluggish demand and a fall in cotton prices. There are 125 textile mills in Andhra Pradesh with a combined capacity of 35 lakh spindles.

Not only Andhra Pradesh-based spinning mills but the entire industry in the country is facing similar challenges. The recent price fall in cotton and polyester fiber could not encourage the downstream industry which is facing a lack of confidence regarding future demand. Spinning mills in other states across India are running at reduced capacity. Mills are facing lower demand even for cheaper polyester yarn.

Garment importers in major markets of the developed world are facing sluggish buying at retail stores. Therefore, they are giving limited orders to exporters. These exporters are also facing problems regarding order cancellations, acceptance of export consignments by importers and payments from buyers. The Russia-Ukraine war has caused an energy crisis which has led to higher inflation across the world. The global economy was already weak due to Covid and is not able to bear the current economic shocks.