Tamil Nadu, which accounts for nearly one-third of India’s textile manufacturing capacity and contributes 28% of the country’s textile and apparel exports, is facing a severe challenge following the U.S. President’s announcement of a 50% tariff on Indian goods. As the single largest textile exporter to the U.S., the state’s industry risks major disruptions, including order cancellations, production stoppages, and job losses.
To address the crisis, a delegation from the Southern India Mills’ Association (SIMA), led by Dr. S.K. Sundararaman, Chairman, and Dr. K. Selvaraju, Secretary General, met Tamil Nadu Chief Minister on August 14, 2025, in the presence of Industries Minister Dr. T.R.B. Raja. The delegation sought the CM’s intervention in recommending to the Prime Minister a relief package to mitigate the impact.
SIMA’s proposals include:
- Two-year moratorium on loan repayments,
- 30% collateral-free loan under ECLGS,
- 5% interest subvention,
- Enhancement of RoDTEP benefits by 5%,
- Inclusion of all textile exports, including yarn, under pre and post-shipment credit.
Dr. Sundararaman emphasized that these measures are essential to prevent units from turning into NPAs and to safeguard working capital, drawing parallels to the Covid-era package, which had helped the industry recover quickly.
The SIMA Chairman also urged the government to address structural issues in raw materials, including the removal of the 11% import duty on cotton and correction of the GST inverted duty structure in the MMF value chain by fixing a uniform 5% GST slab, aligning it with cotton. He stressed that global price competitiveness in raw materials is vital for India’s vision of a USD 350 billion textile economy and Tamil Nadu’s aspiration to become a USD 1 trillion economy by 2030.
Additionally, SIMA appealed for relief in renewable energy regulations, including continuation of windmill banking beyond 20 years, exemption of open-access power purchases from cross-subsidy and additional surcharges for a year, and withdrawal of network charges on captive rooftop solar. Expedited export refunds and GST claims through a single-window mechanism were also sought to ease liquidity stress.
The Chief Minister assured SIMA that he would forward a D.O. Letter to the Prime Minister recommending immediate policy intervention to protect Tamil Nadu’s textile sector, which is under unprecedented strain.