Tiruppur Exporters’ Association (TEA) has written to Union Finance Minister Nirmala Sitharaman to increase interest subsidy to 5 per cent across the board and help protect the knitwear industry, which has been impacted by poor business order.
“We wish to point out that the knitwear exporting units in the Tirupur cluster is now facing a severe threat to their existence due to financial-related issues like fewer booking order, delay in receiving the payment, non-acceptance of booked orders, and deferment of shipment. It is not out of place to mention that the impact of issues is piling up day by day, K M Subramanian, President, TEA said in his letter to the Finance Minister.
Presently a 3 per cent interest subsidy is given on pre and post-shipment rupee export credit for MSME manufacturers and a 2 percent interest subsidy for the non-MSMEs manufacturer and merchant exporter till March 31, 2024, with retrospective effect from October 1, 2021.
Enhance competitiveness
“Considering the difficult situation prevailing in the global markets, it is necessary to enhance our competitiveness and also to sustain the business, we request the Union Finance to advise RBI to increase interest subsidy to 5 per cent across the board and help protect knitwear industry as well as lakh of people, particularly women employees employed with the industry,” said the communication to FM.
Tirupur knitwear cluster is exporting 75 per cent of garments to USA, EU, and UK markets and it is to be noted that the cascading impact of these countries is now quite visible in the export performance of Tirupur. In terms ofdollars, the readymade garment exports for July, August, and September 2022 compared to the corresponding months of last year have declined by 0.60 per cent, 0.34 per cent and 18.06 per cent respectively. It is gathered that in the current month also, the exports are set to witness a decline.