Tirupur Exporters' Association (TEA) has appealed to RBI to restore the original benefit of four per cent Interest subvention on export credit upto March 31, 2009.
Terming as a bolt from blue to exporting units the RBI directive, bringing the interest rates subvention scheme on export credit to a close with effect from Sept 2008, TEA president, A Shaktivel said that it has come at a time when the banks were revising their prime lending rate upwards.
The hiked petroleum products, dearer cotton rates were the major cause of concern and ultimately, these adverse factors had led to escalation of all input costs like cotton yarn, power, transaction and processing, he said, in a letter to RBI Governor Dr Y V Reddy.
India was already losing its market share in US and Europe as exporters could not stay in the competitive market, as competing countries were getting credit at lesser rates.
Stating that Tirupur exporters had alone lost over Rs 100 crore in derivatives, he said that exporters had resorted for derivative deals mainly to offset the losses, which may incur due to continuous falling of rupee against dollar.
The bone of contention is that garment exporting units are no way in a position to increase the price of garments, as it were decided and quoted nine months to one year back, and it would not be allotted proportionately to meet out the rise in input costs and transactions costs, Shaktivel said.
Moreover, the exportrs had worked out and given their costing to buyers based on April 25, 2008 RBI circular suggesting that interest rate subvention would be extended upto March 31, 2009, Shaktivel said.
