Textile exporters stare at losses.

COIMBATORE: Export of cotton  yarn and fabrics has come down due to the Covid-19 pandemic and the subsequent lockdown, say representatives of a textile export association. 

Overseas buyers have cancelled 30% of the orders due to the uncertainty unleashed by the pandemic, chairman of the Cotton Textiles Export Promotion Council (TEXPROCIL) K V Srinivasan said. “Manufacturing units and textile retails in the countries that buy cotton yarn and fabrics from India are closed. So, they are cancelling the already placed orders,” he said. “Not only cotton yarn, orders for cotton fabrics and home textiles such as bedsheets and pillow cases have been cancelled.” 

Exporters are facing problems as buyers are delaying payments against export bills for the shipments already made, Srinivasan said. “Exporters who have entered into forward contracts with banks are now unable to surrender the committed amounts on foreign exchange due to delay in receiving the payments. As a result, they face huge losses as they are forced to either cancel or roll over the forward contracts, which involves penalty and other charges,” he said. 

Srinivasan said to help the sector tide over the crisis, the Centre should include cotton yarn in the merchandise exports from India scheme (MEIS) and rebate of state and central taxes and levies (RoSCTL) scheme. “Fabrics should be included in the RoSCTL scheme. Cotton yarn currently has no such benefits. Also, to address the issue of liquidity faced by the exporters, all pending claims under the technology upgradation fund (TUF) scheme and the erstwhile rebate of state Levies (ROSL) should be released for made-ups and garments.”