Tiruppur Exporters’ Association has urged the Centre for a new Technology Upgradation Fund Scheme retrospectively from April 1, 2022, to extend the interest benefit to the exporting units.

The TUF scheme has benefited the Tiruppur knitwear cluster, having 90 per cent in MSMEs and stand-alone units carrying out job work to the garment-exporting units. The existence of the TUF Scheme is one of the major growth factors for the knitwear export sector since overseas buyers are placing orders only with the units having the best technology machinery. More importantly, the continuous modernisation of machinery is the need of the hour to sustain in the highly competitive environment prevailing in the global export business.

The exporting units were expecting the new TUF Scheme to come into effect from April 1, 2022, immediately after the expiry of the Amended Technology Upgradation Fund Scheme on March 31, 2022. Based on this, the units, including MSMEs, invested in new machinery, the association president KM Subramanian said in a memorandum presented to Darshana Vikram Jardosh, Union Minister of State for Textiles and Railways.

However, no announcement has been made till now on the New TUF Scheme. The association requested the Minister help expediently with announcing the New TUF Scheme.

The association has 1,213 exporting units located in Tirupur Cluster as members, and Tirupur Knitwear Cluster employs six lakh workers directly and two lakhs indirectly. Out of six lakh direct workers, 60 per cent of them are women.

In the last financial year (2021-22), the knitwear export turnover was at ₹33,525 crore. Apart from exports, the domestic business of Tirupur is around ₹27,000 crore.

The RBI has increased the Repo rate, which is also reflected in the Banks Packing Credit. As of now, a 3 per cent interest subsidy is given on Pre- and Post-Shipment Rupee Export Credit for Manufacturer MSMEs and a 2 per cent interest subsidy for non-MSMEs manufacturers and merchant exporter up to March 31, 2024, the association said in the memorandum submitted to the minister during her visit to Tiruppur on Tuesday.

The association sought an increase of interest benefit under the Interest Equalisation Scheme to 5 per cent across the board. It also requested commencing the threshold limit of investment at ₹10 crore with three times turnover in the proposed PLI-2.0 Scheme.

It also urged the Centre to announce the extension of the Emergency Credit Line Guarantee Scheme for one more year and also to avail credit under up to 20 per cent of the borrower’s total fund-based outstanding credit as on December 31, 2022 at the earliest to meet their operational liabilities and also to protect the workers employed with these units.

“We request the minister to help to announce 1 per cent of export turnover of the respective cluster for development of the required infrastructure, which will help to increase exports,” the association said.