“The increase in repo rate at this juncture will increase the cost of credit to exporting units and will have a detrimental effect on exports since Tiruppur knitwear units have been already reeling under pressure due to various factors and unforeseen ramifications after implementation of GST,” TEA president Raja M Shanmugham said in a press release.
Since exporting units take up orders six months prior to shipment, they are not in a position to increase the prices amidst stiff competition in the global market, noted Shanmugham.
He added that the increase in repo rate would particularly affect MSMEs, and hence, banks should take a lenient view while giving credit to such export-oriented units.
In fiscal 2017-18, knitwear exports from Tiruppur declined to ₹24,000 crore from ₹26,000 crore registered in the previous fiscal. (RKS)
ALCHEMPro News Desk – India
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