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24 Jun 2024, Edition - 3268, Monday

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Coimbatore

Repo rate hike to hit struggling knitwear garment sector, say exporters

Covai Post Network

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Coimbatore : Tirupur Exporters’ Association (TEA) today said the increase in repo rate by 25 basis points would impact the knitwear garment sector at a time when the manufacturing units were struggling to sustain in the global market.

TEA president Raja Shanmugham in a statement said this would impact the market, which witnessed the decline of knitwear garment exports in the first quarter of this financial year by 22 per cent compared to last year.

While pointing out the pricing pressure in the global market, he expressed apprehension that the increase in cost of credit would make exporting units uncompetitive and think twice before taking fresh orders.

When the interest rate in the international market is between 2-4 per cent, in India it was in the region of 11 per cent, he said. The Government was providing 3 per cent interest subvention to packing credit as compensation under interest equalisation scheme but should increase it to 5 per cent immediately, he added.

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