Textile mills in Tamil Nadu have lost out significantly on the raw material front, say industry sources. | Photo credit: M. PERIASAMY
More than 300 textile mills have shut down in Tamil Nadu between 2021-22 and 2023-24, according to the annual survey of industries.
Data released by the Union Ministry of Textiles earlier this month showed that in 2021-22, Tamil Nadu had 2,773 textile factories and 2,121 of them were operational. By 2023-24, the number had dropped to 2,455, with only 1,672 mills in operation. A spokesman for a leading textile association said a further 300 factories had closed in the past two years.
The data shows that in 2021-22, there were 11,460 textile and garment manufacturers and 8,771 were in operation. In 2023-24, there were 11,467 textile and garment manufacturers and only 8,503 were in operation. This included textile mills, weaving mills, processing and garment units.
According to industry representatives, nearly two million power bundles have been scrapped over the past few years.
A number of factors are said to have hit the textile industry in the state. Most of the textile industry is in the micro, small and medium enterprise (MSME) segment. Be it raw materials, bank interest rates or energy costs, MSMEs are at a disadvantage. So, a large number of small textile mills have closed shop, said South Indian Spinners Association (SISPA) secretary Jagadish Chandran.
“Tamil Nadu’s textile industry is finding it increasingly difficult to remain competitive compared to other states. For example, the cost of energy for factories in Tamil Nadu is ₹ 9.25 per unit. This is at least ₹ 1 more compared to competing states. Only those textile units that have invested in wind and solar energy have survived, as Tamil Nadu said it should to stem the annual increase in renewable energy costs.
Textile plants lose significantly on the raw material front. Whether it’s cotton, polyester or viscose, factories buy raw materials from the north and transport costs are incurred. The cotton import duty and quality control orders, which are now withdrawn, have affected the industry.
Processing units incur high costs due to zero discharge of liquids, while states like Gujarat allow discharge of treated waste into the sea.
While the state government has recently come up with an integrated textile policy, it should remove caps on subsidies, industry representatives said.
Published – 23 Feb 2026 0:35 AM IST
