Regarding the trade relief measures announced on 14th November 2025 by the Central Government to ease the repayment of term and working capital loans, and to address delays in recovering export proceeds from foreign buyers, the Southern India Mills’ Association (SIMA) said the move would give a fresh lease of life to the struggling industry.
Durai Palanisamy, Chairman of SIMA, expressed his gratitude to Prime Minister Narendra Modi, Finance Minister Nirmala Sitharaman, Commerce and Industry Minister Piyush Goyal, and Textiles Minister Giriraj Singh for announcing a moratorium and deferment on the repayment of term and working capital loans from September 1 to December 31, 2025, for the readymade and made-up sector covered under HS Codes 61, 62, 63 and 94.
To help exporters deal with the severe disruptions in global trade, the Reserve Bank of India has extended the time allowed for the realisation and repatriation of export proceeds from nine months to fifteen months.
The maximum credit period for pre-shipment and post-shipment export loans has also been increased from one year to 450 days for export credits disbursed up to 31 March 2026. In addition, banks have been instructed to relax margin requirements or enhance drawing power, giving businesses better access to funds.
Durai said these measures will improve cash flow for exporters and reduce financial stress during challenging economic conditions, without the burden of heavy interest. Exporters will also benefit from additional time to manage their working capital and realize export proceeds.
He further appealed to the government to extend similar support to the capital-intensive spinning, weaving, and processing segments (HS Codes 52, 54, 55, and 60), which are facing severe financial distress.
These segments supply yarns and fabrics to the readymade and made-up sectors, which have abruptly stopped procurement due to disruptions in exports. Extending relief would help prevent these units from becoming NPAs, he added.
Indian textile and apparel industry
The Indian textile and apparel industry, which contributes 2–3% to the country’s GDP and 12–14% to its merchandise exports, is currently facing an unprecedented crisis. The imposition of a 50% tariff by the United States, along with geopolitical tensions in other major export markets, has weakened the sector’s competitiveness.
This has affected financial stability, export performance, and the livelihoods of millions dependent on the industry.
India’s textile and apparel exports fell by 10.34% in September 2025 compared with the same month last year. Exports of cotton yarn, fabrics, made-ups, and handloom products declined by 11.66%, while apparel exports dropped by 10.14%.
Across decentralised powerloom, knitting, and garment units, production disruptions of 25–70%, coupled with weak demand, have strained revenues, margins, and liquidity. About 82% of firms have been forced to extend credit periods by three to six months.
Exporters are also facing order cancellations as buyers shift to countries with lower tariffs, raising concerns about long-term customer relationships.
The downturn has reduced operations across the sector and led to temporary closures, affecting employment in the textile industry, which supports over 45 million workers directly.
