The Southern India Mills’ Association (SIMA) has welcomed the Tamil Nadu Government’s decision not to increase power tariffs during the current year, describing the move as a significant relief for the state’s textile sector and a positive step toward strengthening industrial competitiveness.
Tamil Nadu is home to one of India’s largest textile manufacturing ecosystems, accounting for nearly 45% of the country’s spinning capacity, 22% of weaving capacity, 70% of knitted garment production, and 40% of home textile manufacturing. The industry, predominantly comprising Micro, Small and Medium Enterprises (MSMEs), has been under increasing pressure due to rising energy costs over the past several years.
According to SIMA, demand charges for High Tension (HT) consumers have increased from ₹350 per MW to ₹608 per MW over the last four years, representing a 74% rise. During the same period, energy charges increased from ₹6.35 per unit to ₹7.50 per unit, an 18% increase. The association noted that Tamil Nadu’s policy of linking annual tariff revisions to the Cost-of-Living Index has further impacted power-intensive industries, particularly textiles.
Power costs account for approximately 40–45% of the total production cost in textile manufacturing. SIMA has consistently urged the state government to avoid further tariff increases, warning that higher electricity costs have contributed to the closure of thousands of MSME units, resulting in significant job losses and reduced economic activity.
A SIMA delegation met Tamil Nadu Chief Minister Thiru C. Joseph Vijay on May 20, 2026, requesting that power tariffs remain unchanged during the current year. The association emphasized that stable power costs would help the industry capitalize on emerging global opportunities and encourage fresh investments under various schemes introduced by both the Central and State Governments.
In a statement, SIMA Chairman Mr. Durai Palanisamy expressed gratitude to Chief Minister Thiru C. Joseph Vijay and Minister for Energy Resources and Law Thiru R. Nirmalkumar for responding positively to the industry’s concerns and announcing that no power tariff hike would be implemented this year.
Mr. Palanisamy also appreciated the proactive measures undertaken by the Energy Department, including the release of a White Paper on the power sector and the development of a long-term roadmap aimed at improving TANGEDCO’s financial sustainability. He noted that ongoing maintenance initiatives and infrastructure upgrades would benefit both consumers and the power utility.
“The government’s decision is a step in the right direction and will help enhance the competitiveness of Tamil Nadu’s textile industry while supporting the state’s vision of becoming a USD 1.5 trillion economy by 2035,” Mr. Palanisamy said.
Industry stakeholders believe that maintaining stable power tariffs will provide much-needed support to textile manufacturers, encourage capacity expansion, safeguard employment, and strengthen Tamil Nadu’s position as a leading textile hub in India.
