Hailed as the dollar town in India, Tirupur exporters are now trying to get a grip of euro currency.
More than 60 percent of the garments from Tirupur went to US and Canada, however, in the wake of rupee appreciation and declining value of dollar, more than 1,000 garment manufacturers and exporters are in queue to get their hands on European markets.
A negative impact of this situation has also been the loss of garment orders to competing countries like China and Bangladesh. Exporters are forced to bring a sea change in their marketing, production and financial strategy to get back their lost contracts.
While talking to Fibre2fashion, sources from the industry said, “Transacting in euro will not be an easy task since international buyers are still not ready to deal in any other currency. Nearly 70 percent of billing is done in dollars of which 30 percent of the clients belong to US itself while the remaining 40 in Europe are also demanding invoice in US currency.”
Further, sources also confided saying “efforts are being made to over come these existing crisis, they are trying to convince the buyers, cut down cost and improve productivity.”
Government on its part has reduced the tax rate for packing by 4 percent (2 percent in July and 2 in November). Besides, it has also increased duty drawbacks by one percent. However, exporters are claiming a complete exemption from the payment of duties on all services and fringe benefit tax.
Thus to conclude, exporters are trying all the means to find a loophole to the existing deplorable trade conditions.
Fibre2fashion News Desk-India
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