Coimbatore, Nov 26 : The capacity utilization of the textile industry in Tamil Nadu, hit by the ongoing slump in the demand in international markets and the acute power shortage, has dropped by 72 percent.

With an investment of almost 50 billion rupees, the textile industry in the state is in a dismal state.

Many mills are on the verge of shutdown as buyers from countries like United Kingdom and United States have cancelled their bulk orders. The yarns manufacturing are also in disarray as Bangladesh and Middle East countries, which import raw material from India, have cut down on their demands due to global recession.

Almost fifty percent of the workers engaged in the industry have lost their jobs and according to the industry sources the situation might turn grimmer. They said that the industry is witnessing the worst period in the living memory.

"Around fifty percent of our labour force have lost their work. Almost ten percent of our small mills have been totally closed down. Ultimately it may lead to lots of mills getting closed in the coming months," said Saunder Rajan, president, South India Small Spinners Association.

India along with China and Pakistan are the major players in the global textile arena. According to the captains in the industry. Pakistan and China have taken adequate measures to combat the receding demands, but the situation in India is yet to improve.

"India along with China and Pakistan are the three major textile exporting countries in the world and in the case of Pakistan the government has come up with incentives. They have done major devaluation in the currency. In China also there is a lot of incentives been given specifically to the textile industry and also to the industries in general. Now they have a new aid package to overcome the financial crisis," said Srinivasan, President, South India Mills Association.

Besides the slump in demand from the recession hit developed countries, the surging raw material costs, long power cuts and high credit cost have added to the woes of textile companies. (ANI)