The communication has been formally issued to members by Chandrima Chatterjee, Secretary General, CITI, for their information and necessary action.

In an effort to address the persistent challenges related to credit availability in the textile industry, a brainstorming session on “Credit Access Issues in the Textile Sector” was convened under the Chairpersonship of Secretary (Textiles) on 15th July 2025. The meeting brought together stakeholders from the industry, financial institutions, and policy bodies to explore practical solutions.

The Ministry of Textiles has conducted a detailed study examining the credit access issues faced by the textile sector, with a particular focus on the difficulties encountered by MSMEs. A comprehensive note outlining these challenges and suggesting a possible way forward has been shared with the industry. The note reflects the core concerns that have been consistently raised by industry players over time.

During the discussion, members highlighted several key issues. One of the prominent concerns was that banks are not adequately capturing the working capital requirements of the textile industry. Factors such as long payment cycles and job work demands are unique to this sector and need to be better understood to make credit more accessible.

Another point raised was the issue of risk perception. Current credit rating systems do not reflect the specific characteristics of the textile industry, making it harder for businesses to secure financing. In response, the Secretary (Textiles) urged stakeholders to propose a textile-specific credit rating protocol that can be recommended for adoption.

Participants were informed that while there are separate funds available for sustainable production—such as energy efficiency and water management—there is a need to consolidate these into a single “Green Fund” dedicated to the textile sector. Members have been invited to share their suggestions on this proposal.

A few key suggestions that emerged during the meeting include monitoring the disbursement and utilisation of the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), which has reportedly seen low uptake by textile MSMEs due to accessibility issues. Enhancing awareness and addressing procedural hurdles were also recognised as essential steps.

To facilitate easier access to credit, it was proposed to establish cluster-level credit facilitation centers. Members have been asked to share their inputs regarding specific clusters and requirements that would support the implementation of these centers.

In addition to the above, stakeholders have been requested to submit their suggestions for improving access to term loans and working capital, especially for textile MSMEs. Inputs are to be shared by 20th July 2025.