| FM, bankers meet textile exporters |
| BS Reporter / New Delhi November 15, 2007 |
| Textile exporters, hit hard by the appreciating rupee, could look forward to some more relief from the government to mitigate their losses. Finance Minister P Chidambaram met exporters from the sector today to take stock of the damage done by the appreciating rupee. Representatives from SBI, Canara Bank and Bank of India were also present at the meeting. Textile exporters have asked for at least a 2% subvention in interest rates on export credit. "We want an interest rate subvention for export credit. We have demanded that export credit should be provided at 6%, which is equivalent to the Bank Rate," said M S Mathivanan, chairman, Powerloom Development and Export Promotion Council. According to trade analysts, the average export credit interest rate currently is 8.5%. "... Finance Minister will examine all suggestions and definitely take some measures," M B N Rao, chairman, Canara Bank, told reporters after the meeting. When asked about the possible measures that could be considered, Rao said : "Financial measures is one aspect but a more comprehensive approach is needed. I am sure the finance ministry is aware of the situation in the sector, and the government will take all possible measures for the textile sector." Textile exporters also took up issues relating to reimbursement of service tax and state levies. "Apart from rupee appreciation, these taxes are also responsible for our losses," added Mathivanan. According to the submission made by powerloom exporters, every 1% appreciation in rupee leads to an erosion of 1.2% in profitability. The sector is witnessing a loss of 9.7% because of the combined effect of rupee appreciation, high interest rates as well as state and central levies. Today |
