Knitwear exporters appeal to Sitharaman to enhance interest subsidy

COIMBATORE: The knitwear garment exporters made an appeal to Union Minister of Finance Nirmala Sitharaman to enhance interest subsidy on packing credit to five per cent to help textile units to increase competitiveness and sustain in the business.

The crisis prevailing in the global market has impacted the textile industry. Notably, in terms of dollar, the readymade garment exports for the months of July, August and September compared to the same corresponding period last year has declined by -0.60 per cent, -0.34 per cent and -18.06 per cent respectively.

“It is likely that this negative export growth will continue to reflect this month also due to uncertainty in the global market. The knitwear export units in Tirupur cluster are now facing severe threat to their existence due to issues like less orders booking, delay in receiving payment, non-acceptance of booked orders and deferment of shipment,” said KM Subramanian, president of Tirupur Exporter’s Association (TEA), in the appeal.

The Tirupur knitwear cluster is exporting 75 per cent of garments to USA, EU and UK markets, where the twin impact of COVID-19 pandemic and Russia-Ukraine war has shifted the priority of households to rise in payment for gas, power and food items rather than purchasing garments. The sector is already facing a lack of a level playing field in the global market against competing countries like Bangladesh, Vietnam, Cambodia and China.

Considering the difficult situation prevailing in the global market, it is necessary to enhance our competitiveness and to sustain in the business, the Union Minister of Finance Nirmala Sitharaman should advise RBI to increase interest subsidy to five per cent across the board, Subramanian said.