Commerce Ministry considering interest subsidy scheme for textiles sector

Federation of Indian Export Organisations (FIEO) has demanded extension of interest subvention scheme with retrospective effect from April 2014 as Indian textile exports is currently facing declining trend and also the textiles sector accounts for about six percent of the country’s total exports, hence there is a need to support this sector by providing credit to exporters at affordable rates.

The Commerce Ministry is considering interest subsidy scheme for textile sector including garments. The interest subvention scheme of 3 percent which ended on March 31, last year provides loans to exporters at affordable rates.

Commerce Secretary Rajeev Kher has recently said that the ministry has completed discussions with the Department of Revenue and soon they would take the decision on the issue. The proposal would also go to the Union cabinet for its approval.

Loans at subsidised rates would help exporters to boost shipments as the country’s overall exports were in the negative zone during the last six months.

Besides global slowdown, dip in oil prices and high interest rates are impacting exporters.

Earlier eight sectors including handicrafts, handlooms, carpets, sports goods, and few engineering products were availing the benefit of this scheme.

FIEO Director General Ajay Sahai said that the cost of credit is important for textiles sector as the exporters are facing stiff competition from countries such as Bangladesh and Vietnam. India’s exports have declined by about 20.19 percent in May to USD 22.34 billion, marking a fall for the sixth straight month. Government should give the interest subsidy benefits to them.