More than 300 textile mills ceased operations in Tamil Nadu between 2021-22 and 2023-24, according to data from the Annual Survey of Industries released earlier this month by the Union Ministry of Textiles.
The figures show that in 2021-22, Tamil Nadu had 2,773 textile mills, of which 2,121 were operational. By 2023-24, the total number of mills had fallen to 2,455, with only 1,672 remaining in operation — indicating a decline of 449 functioning units over the two-year period.
A spokesperson for a leading textile association stated that an additional 300 mills had closed over the past two years, underscoring the mounting stress faced by the sector.
The broader textile and apparel segment has also seen a contraction in operational units. In 2021-22, the State had 11,460 textile and apparel manufacturers, of which 8,771 were active. In 2023-24, while the total number of units marginally increased to 11,467, only 8,503 were operational. The category includes textile mills, weaving, processing and garment manufacturing units.
Industry representatives further indicated that nearly two lakh powerlooms had been scrapped in recent years, reflecting the severity of the downturn.
Jagadish Chandran, Secretary of the South India Spinning Mills Association (SISPA), stated that most textile industries in Tamil Nadu operate within the micro, small and medium enterprises (MSME) segment and are disproportionately affected by rising input costs. He said that escalating raw material prices, higher bank interest rates and increasing power tariffs had placed MSMEs at a structural disadvantage, leading many small-scale mills to shut down.
According to industry sources, Tamil Nadu’s textile sector is finding it increasingly difficult to remain cost-competitive compared with other States. They noted that power tariffs for mills in Tamil Nadu stand at US $ 9.25 (US $ 0.10) per unit, at least Rs. 1 (US $ 0.011) higher than in competing States. Industry representatives observed that only units which had invested in wind and solar energy had managed to remain viable, owing to Tamil Nadu’s relatively flexible renewable energy policy. They added that the annual escalation in power tariffs should be halted.
On the raw material front, mills reportedly face substantial logistical costs, as cotton, polyester and viscose are largely sourced from northern India. Industry representatives also pointed out that earlier import duties on cotton and quality control orders — now withdrawn — had adversely affected the sector.
Processing units, meanwhile, incur high compliance costs due to the requirement for zero liquid discharge, whereas States such as Gujarat permit marine discharge of treated effluents, placing Tamil Nadu units at a comparative disadvantage.
Although the State government has recently introduced an integrated textile policy, industry representatives maintained that subsidy caps should be removed to provide meaningful relief to the sector.
