Gujarat is one of the nation’s largest cotton producers, accounting for around 40 per cent of the total production. Most of Gujarat’s cotton is exported to Tamil Nadu and other south Indian states for spinning; the yarn comes back to Gujarat and Maharashtra for weaving, processing and dyeing.

Tamil Nadu has some 400 large and several hundred smaller spinning units, but is plagued by shortage of power and large transportation costs. At a recent meeting, SIMA members decided to set up mills in Maharashtra or Gujarat. BDO, a private limited firm, made presentations on behalf of the Gujarat government, and a 15-member SIMA team will visit the state soon to examine the possibility of setting up factories.