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Rising Interest Rates In India Pose An Impact On Garment Exporters

2012/3/6 12:28:00 24

The chairman of the India Textile Export Promotion Association (ApparelExportPromotionCouncil), representing the group of exporters of garments in India, recently warned that the increase in interest rates and the weakening of customer demand in the main export markets in Europe and the United States had already struck India's garment exporters.

The chairman of the India Textile Export Promotion Association recently sent a letter to India finance minister PranabMukherjee, calling on the India government to extend the 2% interest subsidy measures to export credit for garment and knitting enterprises. The subsidy scheme has been applied to leather, jute and textile industries, providing the exporters with interest rates below 2% of the market interest rate to reduce the interest burden on enterprises.

India

textile

Dr. ASakthivel, chairman of the Export Promotion Association, said in a letter that the competitive advantage of India's garment industry in the international market has been completely lost due to the rising interest cost. The garment enterprises are trying to find funds to meet the demand for funds.

In addition, the weak demand in major apparel markets in the United States and the EU has severely damaged the export performance of garments and knitted garments in India, resulting in widespread confidence in these enterprises.

In addition, the closure of Tirupur dyeing and finishing plant in India textile town has also led to the cancellation of many export orders by buyers.

He also warned that many garment enterprises in India will soon be classified as bad assets by banks. This is because they are unable to repay their loans, causing the survival crisis faced by garment exporters in India is increasing.

India Reserve Bank

Since March 2010, a total of 13 interest rates have been raised. Dr. Sakthivel said that the loan interest rate of garment exporters in India is higher than 12%, which is a threat to the competitiveness of India, compared with the lending rates of 6% or lower countries such as Bangladesh, Vietnam and Kampuchea.

The chairman of the India Textile Export Promotion Association requested that the measures supported by the Ministry of Finance in India not only include the garment and knitting industry into 2% of the export credit subsidy scheme, but also include the extension of the principal repayment of the long-term loan for 24 months, and

Raw materials

With a sharp decline in the price of finished products, the backlog of liquidity in the enterprise can be pformed into a liquidity loan for a period of 5 years and can be postponed for 1 years.