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Tirupur Exporters Association (TEA) has sought enhancement of interest subvention on pre and post-shipment rupee export credit for knitwear exports from 2% to 4% up to March 31, 2011 for the benefit of the exporting community.In a communication to the union minister for textiles Dayanidhi Maran, president of the association A Sakthivel has requested the minister to take up the matter with the finance ministry and help increase the interest subvention, and also include knitwear garment sector across the board in the RBI notification.He said in the Union Budget 2010-11, to help the exporting sector, finance minister Pranab Mukherjee had extended 2% interest subvention on pre and post-shipment rupee export credit for one more year, from April 1, 2010 to March 31, 2011 for specified export sectors and SME export sector.But, the knitwear garment sector which is reeling under pressure from all quarters needs further support in the form of increased interest subvention, he said.Explaining the current situation in the industry, Mr Sakthivel said, knitwear exporters have, on the one hand, problems like unprecedented rise in cotton yarn prices and increase in dyeing charges and, on the other hand, issues of Euro crisis and demand compression in the global market."Due to these factors, the competitiveness of the garment sector has been affected in the global market. The impact could be in the range of 35% to 40%. A level playing field is required to face the onslaught of competition coming from the countries like China, Bangladesh, Vietnam, Cambodia and Indonesia", he said.Yet another concern that is bogging down the garment industry is in the form of interest rate. The bank interest rate in China is 5.23% and their currency Renminbi is also pegged against the dollar, totally insulated from the currency fluctuations, he explained.
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