Textile mills in India have sought several benefits from the textile ministry. Apart from a 5 per cent interest subvention, they have demanded extension of credit limit from the current three months to nine months in order to enhance their cotton inventory holding capacity. Mills feel that except for a few large players, almost the entire industry ends up buying a very small portion of cotton during the peak season of November to March, while rest is bought by wealthy traders or exported to competing countries like China and Pakistan.

Mills are not in a financial position to stock cotton for the entire year. Hence, most of the good quality cotton is either exported or lands in the hands of large global traders. Textile mills want their cotton stock keeping capacity to be increased.

At present, the textile industry is not able to buy cotton for the entire year, which in turn brings down cotton prices during the peak season. However, later when their stock depletes and demand for cotton increases among textile mills, the commodity's prices rise substantially leading to price fluctuations in the market. Mills feel that if they have enough liquidity, they can buy more cotton and farmers will get better prices as the glut reduces.