Owing to the difficult phase the cotton industry is facing, The Cotton Textiles Export Promotion Council (Texprocil) has urged the Government to extend the three per cent interest subvention benefit to cotton yarn exports.
The much-awaited interest rate subvention scheme on pre- and post-shipment was recently approved by the Cabinet Committee on Economic Affairs. Dubbed as Interest Equalisation Scheme, it will be effective from April 1 for a period of five years. The scheme will be evaluated after three years. The benefits under the scheme were denied for cotton yarn and merchant exporters.
RK Dalmia, Chairman, Texprocil, said the Interest Equalisation Scheme would provide the much needed boost to exports of cotton textiles as all categories of fabrics and made ups have been covered.
Interest rates on export finance are high in India as compared to competing countries such as Bangladesh, Pakistan, Sri Lanka and Vietnam, he said and added that exporters were keenly looking forward towards the announcement of this scheme as they are facing depressed market condition and declining exports.
Lower interest rate would bring down the overall cost for manufacturers and help them to be competitive in the global markets.
The benefits, Dalmia said, should be extended to cotton yarn exporters especially when they are facing intense competition from neighbouring countries amidst sharp fall in demand, especially in China.