SIMA welcomes RBI’s effort for repo rate cut will benefit textile industry

Southern India Mills’ Association (SIMA) chairman M Senthilkumar welcomed the RBI’s effort for reduction of repo rate by 50 basis points to bring it at 6.75 percent. The move will benefit capital-intensive industries such as textiles to improve its competitiveness.

The textile industry had been seeking reduction in interest rates. With reduction in interest rate, the industry will be able to invest more and make the ‘ Make in India’ vision a reality. He appreciated efforts made by the RBI in bringing the guideline for base rate so that the banks follow a uniform procedure.

He appealed to the banks to pass on the benefits to the customers as the textile sector was facing financial stress. Only certain banks have passed on 0.4 per cent benefit while many banks have passed only 0.25 per cent benefit.

Senthilkumar thank the RBI Governor, Prime Minister and Finance Minister for favourably considering the pleas of the industry, particularly the textile industry and constantly reducing the interest rate.

The predominantly cotton based textile industry has been facing several challenges in the last 18 months, including a glut in domestic and global markets, high tariff rates in all major markets compared to competing nations like Vietnam, Pakistan, Cambodia, and more so high cost of funding.