Govt considering interest subsidy for textiles sector

01 Jul '15

2 min read

The commerce ministry is considering interest subsidy benefits for textile sector including garments to arrest falling exports, according to media reports.

The interest subvention scheme of 3 per cent ended on March 31, last year. Under the interest subvention scheme exporters get loans at affordable rates.

The Federation of Indian Export Organisations (FIEO) has been demanding the extension of the interest subvention scheme with retrospective effect from April 2014.

"Cost of credit is important for textiles sector as the exporters are facing stiff competition from countries such as Bangladesh and Vietnam. Government should give the interest subsidy benefits to them," FIEO director general Ajay Sahai said.

As textiles sector accounts for about six per cent of the country's total exports, there is a need to support this sector by providing credit to exporters at affordable rates, an official said.

Commerce secretary Rajeev Kher has recently said that the ministry has completed discussions with the revenue department and soon they would take the decision on the issue.

The proposal would also go to the Union cabinet for its approval.

In 2014-15, textiles exports grew by 12.28 per cent year-on-year to about $17 billion.

Loans at subsidised rates would help exporters to boost shipments as the country's overall exports were in the negative zone during the last six months. India's exports shrank by about 20.19 per cent in May to $22.34 billion, falling for the sixth straight month. (SH)

Fibre2Fashion News Desk – India

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