Production and orders of garment and apparel exporters in Gautam Budh Nagar, Noida have declined over 40 per cent. Also, many of their overseas clients have filed for bankruptcy, thereby putting at risk the payment of collective outstanding dues of over Rs 250 crore.

Lalit Thukral, Chairman-Northern Region, AEPC says, after COVID-19 outbreak, overseas buyers are bargaining with Indian exporters to either take shipments back or sell to them at half price. He said, loopholes in India’s export policy are being exploited as the government has not yet made any policy to safeguard exporters. Although the government had set up Export Credit and Guarantee Corporation of India (ECGC), to mitigate the risk of non-payment to exporters, a majority of exporters remain uncovered by ECGC insurance.

At present, ECGC offers a package for banks at 0.07 per cent of the credit amount, for packing credit taken by an exporter. This can only protect the banks in case the exporter files for bankruptcy. It needs to design a similar policy for micro, small and medium enterprises (MSME) to protect exporters in case of non-payments, said Thukral.

Apparel exporter Manoj Sahu urged the government to extend the ECGC coverage to pre-shipments as well. He also urged ECGC to increase its insurance cap to 90 per cent of total outstanding. A Sakthivel, Chairman, AEPC, wrote to the secretaries of ministry of textiles and ministry of commerce, regarding non-realization of export proceeds due to buyers declaring bankruptcy and cancellation of export orders. According to him, this has led to a major concern, as exporters have already claimed for duty drawback and rebate of state and central taxes and levies (RoSCTL), for the shipped goods.