Exporters in Tiruppur are against an increase in the export credit rate. As per Tiruppur Exporter’s Association (TEA), if banks resort to increase the export credit rate at this juncture, competitiveness of Tiruppur’s knitwear export sector will be reduced and this will happen at a time when India’s competing countries have reduced the rate of interest and have gone in for a deep depreciation of their currencies.

Tiruppur wants an increase of the interest subvention provided under the Interest Equalization Scheme from three per cent to five per cent across the board as existing in the pre-Covid period. Exporters also want the export refinance scheme to be extended to banks to augment export credit. Under such a mechanism, banks would be encouraged to provide export credit in rupee to exporters and the same amount could be refinanced by the RBI at the repo rate.

This is expected to bring down the interest cost for export credit and provide the much needed competitiveness to Indian exports. Tiruppur’s knitwear exports have been falling for the last four months due to the challenging unusual business scenario in the global market and the twin impact of the Ukraine war and Covid pandemic. Tiruppur’s apparel exports fell 21 per cent in October 2022 from October 2021.