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Chairman of the Apparel Export Promotion Council, A. Sakthivel, has condemned the 25 basis points increase in repo rate.
“Ít will hurt the industry, which has sustained growth despite tough times,’’ he said.
Reacting to the second quarter review of the monetary policy for 2013-14, he said: “The garment sector was able to achieve a growth rate of around 13 per cent in the last six months due to the synergistic efforts of all stakeholders, including the Government. Increasing the repo rate at this juncture will be detrimental to the industry; and revising the MSF (Marginal Standing Facility) rate by 25 bps will not very effective in easing out the tight liquidity condition.’’
Reiterating the sector's demand for a separate chapter for pre/post packing credit rate at 7.5 per cent, he said: “This should be considered before the export growth momentum of the sector is lost.’’
Emphasising the need for effecting a downward revision in interest rate, Sakthivel said: “India is one of the largest exporters of readymade garments and made-ups to the world. The country is considered the second most preferred destination by major global retailers. Increasing the cost of finance would therefore put pressure on the margins, which already is wafer-thin,’’ he said.
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