The textile and clothing industry that has been struggling to maintain exports growth and facing tough competition from neighboring countries,is heaving a sigh of relief as the government has increased interest subvention rates from 2 to 3 percent. As D KNair, Secretary General, Confederation of Indian Textile Industry (CITI) points out "The enhancement of interest subvention is a welcome measure. High interest cost is one major factor that has been affecting the cost competitiveness of our textile products in global markets. The 50 per cent increase in interest subvention will be a great help," Nair told media.He mentioned that since a long time the industry has been demanding the government to provide some kind of sops that will boost textile exports from the country.
Even the AEPC has welcomed the move as A Sakthivel, Chairman, says in a statement that the move will help all SME exporters as the availability of capital at low interest is critical component. The government is concerned due to falling exports, and the volatility of the rupee against dollar.Therefore, this intervention was the need of the hour. It will also help in addressing the growing current account deficit. This will surely improved liquidity and help boost apparel exports from India.
Currently, interest subvention covers small and medium enterprises (SMEs), handlooms, handicrafts, garments and made-ups. This also covers yarn and fabrics, which are also highly labour intensive and have been facing tough competition from countries which have lower interest rates, he added.
Opining further SDinakaran, Chairman, The Southern India Mills Association says the decision taken by the government is timely for all textile sectors in the backdrop of balance of payment issues.He has shown immense pleasure as the government has mentioned it will clear all pending claims.
Dinakaranpoints out that since the textile industry is back to normal after severe recession in 2010-11, it can contribute sizably to the country’ exports.During 2012-13, the country's textiles exports stood at $34 billion and the aim is to increase it by 30 percent to over $44 billion in 2013-14.
