Interviews
AEPC demands a separate chapter for export sector
15 Mar '12
2 min read
The Railway Budget 2012-13 announced, that recommended a hike in rail freight is being seen as another jolt to Indian apparel exporting sector after the removal of the prohibition of cotton exports. Chairman Apparel Export Promotion Council, Dr. A. Sakthivel feels that, “The entire industry is going to face the brunt of this freight hike and it will impact the total profitability too.”
“The Indian garment sector is already suffering due to the debt crisis in its major markets, EU and USA. This hike will add on to the pressure of the Indian garment exporters and will have major cost implications on the industry,” he added.
Besides this, the RBI Credit policy has been disappointing too as it has not given any relief to the garment exporters who are paying interest above 12% for packing and credit. "The prevailing interest rates are very high and are posing a threat to India's competitiveness," he further added.
As per the notification released by RBI, though there has been a reduction in the CRR, repo rate and bank rate remain unchanged. "AEPC was looking forward to a reduction in interest rate and some special announcement regarding interest subvention for knitwear and garment exports. However, the RBI Credit policy did not address this. We request the government to look into the matter, “Dr. Sakthivel added.
AEPC is in the view that in order to protect the export sector from increasing credit rates, a separate chapter for export sector is required in Monetary Policy and the export sector should be delinked with the base rate system being followed by the banks.
Dr. A. Sakthivel feels that as the base rate is the minimum lending rate, pre shipment and post shipment export credit in Indian Rupee has to be given at the Base Rate itself. Till a separate chapter for export is announced, the Bank credit rate given to exporters may be fixed at 7.5% as the interest rates prevailing in our competing Countries are lower than our banks rates.
However, the mid-quarter Monetary Policy has not addressed this.
Incorporated in 1978, Apparel Export Promotion Council (AEPC) is the official body of garment exporters that provides invaluable assistance to Indian exporters as well as importers/international buyers who choose India as their preferred sourcing destination for garments.
“The Indian garment sector is already suffering due to the debt crisis in its major markets, EU and USA. This hike will add on to the pressure of the Indian garment exporters and will have major cost implications on the industry,” he added.
Besides this, the RBI Credit policy has been disappointing too as it has not given any relief to the garment exporters who are paying interest above 12% for packing and credit. "The prevailing interest rates are very high and are posing a threat to India's competitiveness," he further added.
As per the notification released by RBI, though there has been a reduction in the CRR, repo rate and bank rate remain unchanged. "AEPC was looking forward to a reduction in interest rate and some special announcement regarding interest subvention for knitwear and garment exports. However, the RBI Credit policy did not address this. We request the government to look into the matter, “Dr. Sakthivel added.
AEPC is in the view that in order to protect the export sector from increasing credit rates, a separate chapter for export sector is required in Monetary Policy and the export sector should be delinked with the base rate system being followed by the banks.
Dr. A. Sakthivel feels that as the base rate is the minimum lending rate, pre shipment and post shipment export credit in Indian Rupee has to be given at the Base Rate itself. Till a separate chapter for export is announced, the Bank credit rate given to exporters may be fixed at 7.5% as the interest rates prevailing in our competing Countries are lower than our banks rates.
However, the mid-quarter Monetary Policy has not addressed this.
Incorporated in 1978, Apparel Export Promotion Council (AEPC) is the official body of garment exporters that provides invaluable assistance to Indian exporters as well as importers/international buyers who choose India as their preferred sourcing destination for garments.
Apparel Export Promotion Council
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