News

Economy

India: Textile industry after bi/tri-furcating Andhra

• By  Textile Excellence
• August 21, 2013

While the politicians in-fight over various roadmaps, textile industry better foster a joint roadmap in AP

Whatever be the outcome of Telangana-Seemandhra-Rayalaseema (dis)union in India’s Andhra Pradesh, one thing is quite certain: Cotton industry will suffer in Andhra Pradesh (AP). That is based on the presumption that the Indian states do not cooperate easily with each other.

If 10 districts of Telangana region are granted statehood (T-State), as the popular demand goes, T-State will be left clutching huge surplus of cotton bales which they can sell to the highest bidder from any of the neighboring states, while Coastal Andhra’s spinning mills will be starving for raw material, apart from, of course, power.

Going by 2007-08 statistics, 10 districts of T-State produced 2,480 thousand cotton bales out of AP’s total output of (3^rd largest cotton producer of India) 3,494 thousand. A whopping 71%.

AP has about 150 mills, out of which 50-odd are located in the Telangana region, with coastal Andhra having a lion’s share.

“It will be a new situation for the mills from Andhra which would have to buy cotton from the new state, paying CST and losing out on Modvat credit,” says G. Punnaiah Chowdary, Chairman of the AP Spinning Mills Association.

Sans GST and an inked memorandum between the two regions, this problem can only compound.

Source: Cotton Statistics at a Glance

Textile Excellence