The textile and clothing industry that has been struggling to maintain exports growth and facing tough competition from neighbouring countries will now have a sigh of relief as the government has increased the interest subvention rates from 2 percent to 3 percent, said D.K.Nair, Secretary General, Confederation of Indian Textile Industry (CITI) while hailing the government's initiative that will benefit exporters.
"The enhancement of interest subvention is a very welcome measure. High interest cost is one major factor that has been affecting the cost competitiveness of our textile products in global markets. The 50% increase in interest subvention will be a great help," Nair said to SME Times.
He mentioned that since a long time the industry has been demanding the government to provide some kind of sops that will boost textile exports from the country.
Currently, the interest subvention covers small and medium enterprises (SMEs), handlooms, handicrafts, garments and made-ups. This also cover yarn and fabrics, which are also highly labour intensive and have been facing tough competition from countries which have lower interest rates, he added.
Opining further S.Dinakaran, Chairman, The Southern India Millsâ€™ Association said the decision taken by the government is timely for all the textile sectors in the backdrop of balance of payment issues.
He has shown immense pleasure as the government has mentioned to clear all pending claims.
Dinakaran said that since the textile industry is back to normalcy after severe recession in 2010-11, it can contribute sizably for the countryâ€™s exports.
During 2012-13, the country's textiles exports stood at USD 34 billion and the aim is to increase it by 30 percent to over USD 44 billion in 2013-14.