Rupee Crisis - SRTEPC chairman for urgent action

Shri Sanjeev Saran, Chairman of The Synthetic & Rayon Textiles Export Promotion Council (SRTEPC) has appealed to the Union Minister of Finance to implement quickly the package of measures recommended by the Union Minister of Commerce and Industry to counter the impact of rising rupee of exports of Man-made Fibre textiles.

Shri Saran informed that during the last month export orders for Man-made textiles have declined drastically and was apprehensive that orders would be increasingly diverted to competing countries like China, Taiwan, Korea, Pakistan etc. causing irreparable damage to exports. Market loss at this crucial stage would be nearly impossible to re-capture in future. According to Shri Saran any delay in tackling the problem of rising rupee would also lead to closure of many manufacturing units in Man-made Fibre Textiles sector and consequent loss of jobs.

The SRTEPC Chairman added that the man-made fibre textile sector, dominated by small and medium enterprises, is hit hard due to 11% increase in value of rupee vis-à-vis US$ in last 3 months coupled with restricting bank credit that has seen lending rates rise by at least 300-400 basis points. The SME sector does not have inherent ability to absorb sudden shocks. To add to their woes, the exporters are faced with a continuous increase in prices of all basic raw materials in the man made textile sector.

Shri Saran observed that the MMF textile Industry was upbeat till recently due to increasing exports and expansion of domestic mall culture resulting in huge demand. Large investments were committed in downstream value chain to cater to surge in demand of bottom wear fabrics, light weight shirting and made-ups. However in the present scenario, the investment plans have been kept on hold which obviously means the creation of new Jobs will be curtailed. It has to be noted in this context that the bulk of production of Man-made fibre textiles is carried out by the small and medium enterprises in clusters in Surat, Ahmedabad, Bhilwara, Bhiwandi, Ludhiana, Salem, Erode etc. These manufacturers in turn employ large number of people to carry out additional work on the material such as embroidery. Slow down in export activity has already started seriously affecting these units as well as the employment of a large number of people connected to them.

The SRTEPC Chairman concluded that textiles sector, especially man-made fibre textiles, was the hardest hit by the appreciating rupee and appealed for immediate remedial action to tackle the crisis.