Tirupur Exporters’ Association (TEA) has urged Union Minister of Finance and Minister of Corporate Affairs Nirmala Sitharaman to support the Tirupur apparel industry in the upcoming union budget.
K.M.Subramanian, President, TEA submitted the pre-budget memorandum in this regard and mentioned about the cluster’s requirements.
The RBI has increased the Repo Rate which is reflected in the Banks Packing Credit also and as of now, 3 per cent interest subsidy is given on Pre- and Post-Shipment Rupee Export Credit to MSMEs and 2 per cent interest subsidy for Non-MSMEs and Merchant Exporters up to 31st March 2024.
TEA has urged to announce the increasing of Interest benefit under Interest Equalization Scheme to 5 per cent across the board and help to protect knitwear industry as well as lakhs of people, particularly women employees employed with the Industry.
It is also looking to extend ‘Export Refinance Scheme’ to banks to augment export credit and wishes to note that under such a mechanism, banks may be encouraged to provide export credit in Rupee to exporters and the same amount can be refinanced by the RBI at the Repo Rate.
“There is no doubt that such a mechanism will bring down the interest cost for export credit providing the much-needed competitiveness to our exports. Considering the plight of Tirupur’s export knitwear sector, comprising 90 per cent of MSMEs, we request the Government to announce this facility,” said TEA President.
He also underlined that Tirupur exporting units, comprising 90 per cent of MSMEs, have been finding it difficult to fulfil the Export Obligation for the capital goods imported under EPCG scheme/raw materials imported under Advance Licensing scheme within the stipulated period due to twin impact of pandemic on global market and increase in yarn prices and also impact caused due to Ukraine-Russia war. As the exporting units have to pay the interest apart from normal customs duty to regularise the case, an amnesty scheme to settle the issue is also required.
