The Southern India Mills Association (SIMA) has appealed for a reduction in power tariffs.

SIMA says Tamil Nadu’s textile industry would become uncompetitive with the recent steep increase in the power tariff. Since power cost accounts for over 40 per cent of the cost of production, with the revised power tariff, spinning and weaving mills in the state would become uncompetitive. Competitiveness of the downstream sectors like power loom, handloom, garment and made-ups segments would be badly affected.

SIMA estimates that for a spinning mill having 25,000 spindles, the power tariff increase per year would be to tune of Rs.1.2 crores. The global competitiveness of power intensive sectors like textiles would be eroded. The association feels the revised tariffs would nullify the effects of attractive industrial policies in attracting new investments.

Tamil Nadu has revised energy charges. The tariff revision has come after a period of five years.The Tamil Nadu textile industry is a third of the country’s textile industry and has around 45 per cent of the spun yarn manufacturing capacity of the country. However Tamil Nadu does not have the raw material base (cotton and manmade fibers) and sources over 97 per cent of its raw material mainly from states like Gujarat, Maharashtra and Telangana.