Tamil Nadu, which accounts for nearly one-third of India’s textile manufacturing capacity and contributes 28% of the country’s total textile and clothing exports, has consistently taken proactive measures to boost global competitiveness and export growth. Recent state initiatives such as a 6% interest subvention for spinning modernization, a 50% capital subsidy for garmenting and home textiles, and a 50% subsidy for engaging technical textiles consultants have significantly strengthened the sector, with additional supportive policies already in the pipeline.
The conclusion of Free Trade Agreements (FTAs) with countries like the UK, Australia, UAE, Switzerland, and Japan has further expanded export opportunities for Tamil Nadu’s textile units. However, the recent announcement by the U.S. President to impose a 50% tariff on Indian goods has dealt a severe blow to the textile value chain, particularly for Tamil Nadu, which is the single largest exporter of textiles to the American market.
In response, a delegation of industry representatives and associations met the Hon’ble Chief Minister of Tamil Nadu on 14th August 2025 in the presence of the Hon’ble Minister for Industries, Dr. T. R. B. Raja. The delegation stressed the need for immediate, coordinated interventions by both the State and Central Governments to address the crisis. Dr. S. K. Sundararaman, Chairman, and Dr. K. Selvaraju, Secretary General of SIMA, submitted a detailed memorandum on behalf of the industry.
In a press statement, SIMA Chairman Dr. Sundararaman expressed gratitude to Dr. T. R. B. Raja for convening the meeting and to the Hon’ble Chief Minister for attentively hearing the delegation and agreeing to send a D.O. Letter to the Hon’ble Prime Minister. The CM’s recommendation will seek urgent policy measures to avert job losses, prevent production halts, explore new markets, retain existing buyers, and protect textile manufacturing units from potentially irreparable damage.
SIMA has appealed for a two-year moratorium on principal repayments, a 30% collateral-free loan under the Emergency Credit Guarantee Scheme (ECLGS), and a 5% interest subvention. Dr. Sundararaman emphasized that such measures are vital to prevent textile units from slipping into NPAs, covering running costs, and maintaining working capital. He drew parallels with the Covid-19 relief package, which had enabled the industry to recover swiftly after lockdown disruptions, highlighting that the U.S. tariff shock is similar in impact, with buyers suspending or renegotiating orders, and in many cases, canceling them.
Additionally, SIMA has called for enhancing the RoDTEP benefit by 5% and extending pre- and post-shipment credit to all textile products, including yarn, in order to sustain existing markets and capture new ones, especially in the U.S.
Dr. Sundararaman also urged the Chief Minister to recommend to the Prime Minister a strong push for addressing raw material structural challenges. He stressed the importance of removing the 11% import duty on cotton and rectifying the inverted GST duty structure in the MMF value chain by aligning it under the 5% slab, similar to cotton. This, he noted, is crucial to ensure raw materials are available at globally competitive prices and to realize India’s target of achieving a USD 350 billion textile industry while supporting Tamil Nadu’s ambition of becoming a USD 1 trillion economy by 2030.
Furthermore, SIMA appealed for state-level benefits under Renewable Energy Regulations, including continuation of the annual banking scheme for windmills over 20 years old, withdrawal of network charges on captive rooftop solar projects, and temporary exemption of open access power purchases from cross-subsidy and additional surcharges for one year. These steps, Dr. Sundararaman highlighted, would greatly assist the power-intensive textile industry during the current crisis. He also requested expedited export refunds through a single-window mechanism and quicker settlement of State GST refunds for exports and inverted duty claims to ease working capital stress.