Export Promotion Council for Handicrafts (EPCH) chairman O P Prahladka today urged the government to immediately start the refund of taxes due to liquidity crunch being faced by exporters.
"About Rs 3,500 crore is stuck and it is impacting handicraft exporters which are mainly in MSME sector. These delays and other reasons may lead to dip in exports in 2017-18 by 3.5 per cent," Prahladka told PTI.
Exporters work on small capital and they are also not able to borrow from banks due to interest rates.
"We have also asked to increase interest subsidy to 5 per cent from 3 per cent," he added.
More From This Section
In 2016-17, exports from the sector aggregated to Rs 24,500 crore. The segment employs about 7 million people directly and indirectly.
Major export destinations for domestic handicrafts items include the US, Europe, South America, Africa and China.
The US and Europe together account for about 60 per cent of the country's total handicraft exports.
EPCH is organising a five-day fair in Greater Noida to attract overseas buyers.