The textile representative body, Tiruppur Exporters Association (TEA) has requested the governing body to increase the Interest Equalization scheme (IEs) rate to 5 per cent. The current IE scheme rate is 3 per cent as the increment will help to compensate in repo rate.
TEA, president, Raja M Shanmugham in a press release said that the increase in repo rate at this juncture will not only increase the cost of credit to exporting units but will also have a detrimental effect on exports since Tiruppur knitwear units have been already reeling under pressure due to various factors and unforeseen ramifications after GST implementation.
The exporters take up orders six months prior to shipment, it is not possible for them to bear price inflation among the stiff competition faced by them in the global market, he added.
Shanmugham said that increased in repo rate would directly affect MSMEs, and hence, banks should take a merciful view while giving credit to such export-oriented units.
In the last fiscal, Tiruppur knitwear exports declined from Rs. 26,000 crores to Rs. 24,000 crores registered in 2016-17.
– Apparel and Textile News, Apparel Talk, Indian Apparel
