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Our Bureau

Coimbatore, Sept. 21 The rupee breaching the 40-mark against the dollar in the last two days has sent alarm bells ringing for the country’s textiles and clothing exporters yet again.

“We thought the rupee would stabilise at 40 against the dollar but the current slide the dollar has begun to post against rupee is worrying us giving further uncertainty in the market,” said the President of Karur Textile Federation and Chairman of the Karur-based Amaravathi Textiles, Mr Siva Kannan.

A dismayed Mr Siva Kannan said “all along we were buying time in booking new orders as the rupee-dollar value parity had kept the shippers at the negotiating table because in most cases, the buyers were insisting on old rates”. This being the scenario, the current surge in rupee value would only heighten the uncertainty, he said, adding that export would further become unviable because of the dollar value erosion.

The knitwear exporters in Tirupur, rudely jolted by the rupee-dollar volatility in April last, are further crestfallen by Thursday’s dollar breaching the rupee below Rs 40.

“The knitwear export growth is sure to take a hit and in all likelihood it will post a negative growth this year by some five per cent,” said Mr A. Sakthivel, President of Tirupur Exporters Association.

He felt that the July-September quarter knitwear shipments would take full impact of a hardening rupee and the current wave of rupee appreciation would further distance the buyers from Indian garment houses.

The TEA President maintained that the interest rate cut effected by the US Federal Reserve would no way be beneficial to trade such as textiles and he does not expect this move to pep any increase in garment exports to the US either.

Supportive action from the Government such as lowering of interest rate for textile shippers and reduction in the service tax for exporting companies are being demanded by the knitwear exporters as something to ameliorate the adverse scenario like the one faced by them, and the TEA has approached the Tamil Nadu Government to take up this issue with the Centre.

More Stories on : Knitwear & Hosiery | Forex

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