Southern India Mills Association praised the Central Government's ECLGS 5.0 scheme as a timely measure to tackle financial stress caused by the Middle East crisis. SIMA Chairman Durai Palanisamy highlighted how the initiative provides crucial liquidity support to textile industries facing operational challenges and rising logistics costs.
Coimbatore: The Southern India Mills Association has welcomed ECLGS 5.0 initiative by Central Government.
'SIMA' Chairman Durai Palanisamy said, We welcome ECLGS 5.0 initiative by Central Government which is Timely Initiative to Address Financial Challenges Arising from the Middle East Crisis.
The financial stress faced by the industry in meeting operational expenses, particularly during the COVID-19 period, was effectively addressed by the Government through the introduction of the ECLGS in 2020, aimed at providing immediate liquidity support to MSMEs and business enterprises to meet their operational liabilities.
Subsequently, reflecting the resilience of the industry as evidenced by improvements in PMI and export performance, the second version of the scheme was introduced to extend support to stressed sectors, including the textile sector, with enhanced eligibility and a credit cap of up to Rs.500 crores.
The prevailing geopolitical situation, particularly the Middle East crisis, has significantly impacted the textile sector. The industry remains dependent on the region for key raw materials used in the man-made fibre segment, while exports of value-added products to global markets have been adversely affected. This is primarily due to the abnormal increase in logistics costs and a shift in consumer spending behaviour, with a growing preference for lower-cost products.
With initiatives focused on export risk mitigation, logistics and trade facilitation, and the creation of new and strategic international markets through the conclusion of FTAs, these measures are aimed at stabilizing operations, safeguarding exports, and maintaining global competitiveness despite ongoing geopolitical disruptions.
The major hindrance faced by the industry has been the lack of adequate working capital to sustain manufacturing capacity, retain the workforce, procure essential inputs, and service existing bank loans.
Introduction of ECLGS 5.0.Timely and much-needed initiative that has significantly benefited the industry by providing additional liquidity support to businesses impacted by recent global disruptions, particularly the West Asia crisis.
Textile industry believes that ECLGS 5.0 will play a vital role in stabilizing production, protecting employment, and sustaining the sector’s contribution to exports and economic growth, particularly at a time when raw cotton prices are witnessing abnormal and frequent increases.
The ECLGS scheme, coupled with the TEEM scheme and the Mission for Cotton Productivity with an outlay of Rs.5659.22 crores approved by the Cabinet in the recent Union Budget, will provide a strong impetus to the growth of the industry and enhance its competitiveness in both global and domestic markets.He said.
'SIMA' Chairman Durai Palanisamy said, We welcome ECLGS 5.0 initiative by Central Government which is Timely Initiative to Address Financial Challenges Arising from the Middle East Crisis.
The financial stress faced by the industry in meeting operational expenses, particularly during the COVID-19 period, was effectively addressed by the Government through the introduction of the ECLGS in 2020, aimed at providing immediate liquidity support to MSMEs and business enterprises to meet their operational liabilities.
Subsequently, reflecting the resilience of the industry as evidenced by improvements in PMI and export performance, the second version of the scheme was introduced to extend support to stressed sectors, including the textile sector, with enhanced eligibility and a credit cap of up to Rs.500 crores.
The prevailing geopolitical situation, particularly the Middle East crisis, has significantly impacted the textile sector. The industry remains dependent on the region for key raw materials used in the man-made fibre segment, while exports of value-added products to global markets have been adversely affected. This is primarily due to the abnormal increase in logistics costs and a shift in consumer spending behaviour, with a growing preference for lower-cost products.
With initiatives focused on export risk mitigation, logistics and trade facilitation, and the creation of new and strategic international markets through the conclusion of FTAs, these measures are aimed at stabilizing operations, safeguarding exports, and maintaining global competitiveness despite ongoing geopolitical disruptions.
The major hindrance faced by the industry has been the lack of adequate working capital to sustain manufacturing capacity, retain the workforce, procure essential inputs, and service existing bank loans.
Introduction of ECLGS 5.0.Timely and much-needed initiative that has significantly benefited the industry by providing additional liquidity support to businesses impacted by recent global disruptions, particularly the West Asia crisis.
Textile industry believes that ECLGS 5.0 will play a vital role in stabilizing production, protecting employment, and sustaining the sector’s contribution to exports and economic growth, particularly at a time when raw cotton prices are witnessing abnormal and frequent increases.
The ECLGS scheme, coupled with the TEEM scheme and the Mission for Cotton Productivity with an outlay of Rs.5659.22 crores approved by the Cabinet in the recent Union Budget, will provide a strong impetus to the growth of the industry and enhance its competitiveness in both global and domestic markets.He said.