Tamil Nadu Freezes Power Tariff Hike for 2026; SIMA Welcomes Relief for Textile Industry

Textile industry body says decision will support MSME manufacturers amid rising power costs and ongoing investment plans

The Southern India Mills’ Association (SIMA) has expressed its appreciation to the Government of Tamil Nadu for deciding not to implement a power tariff increase during the current year, stating that the move will provide relief to the State’s textile industry.

According to SIMA, Tamil Nadu accounts for 45% of the spinning capacity, 22% of the weaving capacity, 70% of the knitted garment manufacturing capacity, and 40% of the home textiles manufacturing capacity in the country. The association said the industry's competitiveness has been affected by successive increases in power tariffs over the years.

SIMA noted that the industry has repeatedly requested the Government to avoid further increases in demand charges, which have risen from Rs.350/MW to Rs.608/MW over the last four years, representing an increase of 74%. During the same period, energy charges for HT consumers increased from Rs.6.35 per unit to Rs.7.50 per unit, an increase of 18%.

The association also stated that Tamil Nadu is the only State where a policy linking annual power tariff revisions of up to 6% to the Cost-of-Living Index has been implemented. According to SIMA, power costs account for nearly 40-45% of the textile industry's total production cost. It added that tariff revisions have also affected LTCT and domestic consumers and said the higher power costs have contributed to the closure of several thousand MSME units in the State, resulting in employment losses and reduced government revenue.

SIMA said its delegation met the Hon’ble Chief Minister of Tamil Nadu on 20th May 2026, requesting that power tariffs not be increased during the current year. The association stated that the request was made to help the textile industry sustain operations, utilise emerging global opportunities, and encourage investments under schemes announced by the Government of India and the Government of Tamil Nadu.

According to SIMA, the Hon’ble Chief Minister and the Hon’ble Minister for Energy Resources and Law responded positively to the industry's representation.

Mr. Durai Palanisamy, Chairman, SIMA

In a press release issued today, Mr. Durai Palanisamy, Chairman, SIMA, thanked Hon’ble Chief Minister Thiru. C. Joseph Vijay and Hon’ble Minister for Energy Resources and Law, Thiru R. Nirmalkumar for announcing that no power tariff increase would be implemented during the current year.

He also appreciated the initiatives undertaken by the Energy Department, including the release of a White Paper and a long-term plan aimed at improving TANGEDCO's financial position, completing maintenance and backlog projects within a defined timeframe, and implementing measures intended to benefit both consumers and TANGEDCO.

Mr. Durai stated that the Government of Tamil Nadu's announcement is a step towards supporting the State's objective of achieving a 1.5 Trillion Dollar economy by 2035.