In a letter issued to the union finance ministry A Sakthivel, Vice-Chairman, Apparel Export Promotion Council (AEPC) stressed that many exporters were not able to meet their working capital issues and are either forced to downsize or close their businesses. This relates to the decision of the Union government to scrap the merchandise export incentive scheme (MEIS) under which incentives of about Rs 500 crore was due for the units. The council has highlighted the government’s that this action would lead to many export units being forced to close down and subsequently spark an unemployment crisis.

APEC has pointed out that the Centre has yet to implement rebate of state and central taxes and levies (RoSCTL), launched in March, which is affecting the exporters. MEIS is one of the supportive schemes for the apparel industry to offset infrastructural inefficiencies and associated costs. It was suspended by the central government on August 1. As per industry sources, more than Rs 500 crore are outstanding in the MEIS for the apparel exporters in Tirupur alone.