The Indian spinning industry is facing its biggest ever crisis. One third of the country’s spinning capacity is closed. Mills are currently incurring huge losses and the upcoming cotton crop of four crore bales is struggling to find buyers in India and abroad. The textile sector has witnessed big job cuts — over 25 lakh jobs — in the last decade.

Even the cotton ginning industry which is a supplier to textile mills is in the doldrums. For instance there were 422 ginning mills in Punjab in 2007 and the number has come down to 60. Nearly 40,000 workers were employed by ginning factories. In the last 12 years, 34,000 jobs have been lost.

The decline in exports in the first quarter of the current fiscal has come to haunt cotton growers. The 27 per cent increase in the minimum support price for cotton in India is making their produce internationally uncompetitive. Cotton in the international market is cheaper than in India. Farmers are worried that these trends will affect the market prices of cotton, the harvest for which will begin in the first week of September. Cotton has been sown over nearly 16 lakh hectares in the three states of Punjab, Haryana and Rajasthan.