Anticipating the adverse impact of coronavirus on export realisations and working capital for the textile and apparel sector, exporters and industry representatives have sought relief measures from the government to mitigate the crisis faced by the highly capital- and labour-intensive segments.
While the Confederation of Indian Textile Industry (CITI) has appealed to the Prime Minister to immediately announce a relief package to tide over the situation, Apparel Exports Promotion Council (AEPC) has written to the Finance Minister seeking her intervention.
"We believe the current situation in the sector is extremely grave which warrants urgent remedies and support from your end. In absence of such relief measures, NPAs (non performing assets) may increase, impacting the sector's overall credit ratings," AEPC Chairman A Sakthivel wrote in the letter to Finance Minister Nirmala Sitharaman.
The Council listed nine points as part of the immediate relief measures, including faster clearance of banking and packing credit, extension of packing credit period from 270 days to 360 days, extension of bill realisation period by RBI from nine months to one year, and delay in declaring companies' accounts as NPAs.
Other requests include RBI exempting exporters from caution listing for at least a year, enhancing existing limits for advances of exporters by 25 per cent, asking commercial banks to enhance collateral-free lending up to Rs 2 crore and capping of collateral requirement at 35-40 per cent for lending beyond Rs 2 crore, and extending the enhanced 5 per cent Interest Equalisation Scheme for MSMEs to all apparel exporters.
"The Interest Equalisation Scheme may kindly be extended for a period of 2 years up to 31 March 2022," the letter added.
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Sakthivel wrote similar letters to RBI Governor Shaktikanta Das and chiefs of public and private banks on behalf of the more than 8,000 apparel exporters in the country.
CITI Chairman T Rajkumar said the Centre's directions to close all the malls and retail outlets has resulted in substantial reduction in the sales of the domestic textiles and clothing industry.
He requested the Prime Minister to immediately announce a relief package for the textile and apparel sector and sought support in various forms, including moratorium for repayment of principal and interest amount to banks for four quarters (1st April 2020 to 31st March 2021).
He also sought exemption for all raw materials, dyes & chemicals, intermediaries, spares and accessories from anti-dumping duty and basic customs duty.
Rajkumar also sought inclusion of cotton yarn and fabrics under RoSCTL, IES and MEIS benefits with immediate effect to prevent job losses for lakhs of people in the handloom, powerloom and spinning sectors.
He demanded extension of soft loan equivalent to government dues pending in the books of individual textile units that could be adjusted soon as the government clears subsidy dues and reduction in the bank interest rate by 3 per cent.