The 13-day-old strike of the power-loom workers in Tamil Nadu, demanding wage hike, was called off at midnight on 28 August 2008 when the tripartite talks convened by the Tamil Nadu government reached a consensus. The workers in Coimbatore district, who also own the power looms, had been on strike from 16 August 2008, seeking 100 per cent wage increase from the textile manufacturers, who give them the yarn to weave into cloth. They were also demanding immediate initiatives to solve the issues raised by the textile manufacturers regarding the power problems and tax structure.

Prior to this settlement, there were four rounds of talks, initiated by the minister for Rural Industries and Animal Husbandry Pongalur N Palanisamy and District Collector V Palanikumar with the textile manufacturers, power-loom owners and trade union representatives. But the manufacturers refused to increase the wages, pointing out that the stocks of fabric are piled up with them, following the slowdown in the market and, therefore, they were not in a position to increase the wages. Later on, however, due to the pressure built in the tripartite talk, they came to a settlement. According to the current settlement, the Somanur Yarn weavers would get a wage hike of 32 per cent and the rest would get a hike of 27 per cent, effective from 15 September 2008. 

The official estimate states that the strike caused a loss of around Rs 450 crores because the nearly two lakh power looms remained silent in Somanur, Palladam, Mangalam, Karumathampatti and Avinashi.

The decentralised power loom sector plays a pivotal role in meeting the clothing needs of the country. Cloth production and employment generation have been rapidly increasing in the power-loom sector. Coimbatore district alone has about two lakh power looms directly employing around two lakh workers.