Indian Apparel exporters have requested the government to extend the interest equalization scheme for a minimum of two years and at a rate of 5 percent for all Apparel exporters.
In a letter to Commerce and Industry Minister Piyush Goyal, Apparel Export Promotion Council (AEPC) Chairman A Sakthivel wrote, “Given the extremely volatile and uncertain cash flow situation of the Apparel exporters, we request you to kindly announce continuity of the interest subvention scheme which expired on March 31, 2020.
“It is also requested that this enhanced 5 percent Interest Equalization Scheme so far available to MSMEs may also kindly be extended to all the Apparel exporters for at least two years up to March 31, 2022 to enable the industry to have affordable access to credit. In the absence of any announcement on this scheme, the banks are debiting the accounts of the exporters,” the AEPC chairman said.
Sakthivel further requested Piyush Goyal to impress upon the Ministry of Finance and the RBI Governor on certain other issues that are affecting the apparel exporters.
The requests include extension of packing credit and forward contract by 6 months without penal interest and waiver of penalty imposed on forward covers by some banks. He also requested for an increase in working capital limits by minimum 25% without any additional collateral.
“Sir, the present crisis is the biggest challenge faced by our Apparel Export Industry. Your decisive and timely action will help mitigate the suffering of the Apparel Industry and the millions of our workers,” the letter said.
Sakthivel thanked the Commerce and Industry Minister for taking bold and pragmatic initiatives to help the industry in mitigating the present huge crisis.