Garment exporters demand sops to counter US, EU slowdown.

NEW DELHI: The garment industry is demanding export sops and interest rate subsidy in addition to assured raw material supply to deal with the difficult economic situation in the United States and the European Union, which are major destination for Indian exporters.

The Apparel Export Promotion Council (AEPC) has also made a case for loan restructuring, something that the entire textiles industry has been demanding for several months. This in addition the demand for 2% interest subsidy as the garment industry is grappling with high cost debt with interest rates hovering 5-6% above the usual rates.

"With a view, units to continue uninterrupted manufacturing and to continue to give employment to a large number of workers in the weaker section, there is a need to provide policy support so that the credit at the cheaper rate is available," AEPC chairman A Sakthivel wrote in a letter to the Federation of Indian export Organisations (Fieo), the apex trade body.

On raw material security - a big area of concern given the recent flip flops on cotton exports - AEPC has demanded that "a regular policy on this be introduced so that buffer stock can be announced and maintained".

Fieo is coordinating with the government for the Board of Trade meeting on May 17, which will be chaired by commerce & industry minister Anand Sharma. The meeting assumes significance as the inputs will be used for the formulation of the Foreign Trade Policy.

Sakthivel suggested that the interest subsidy should not be confined to small and medium enterprises as it will help the entire garment and knitwear sector tide over a tight monetary situation.

Further, the industry body has suggested that several other export incentives, ranging from benefits of the Market Linked Focus Product Scheme to the Focus Market Scheme, which can be used to push garment exports to Russia, South Africa, Brazil, South Korea, Japan and Australia, should be provided.

It has also suggested that the Gold Card Scheme be reintroduced so that exporters can buy duty free oil from domestic oil companies for their factory use for self generation of power through generators or captive plant.

Source : timesofindia.indiatimes.com