When Europe gets cold Tamil Nadu sneezes. The adage has been proved again as countries like Germany, France and Britain announced lock down due to Covid-19 pandemic leaving nearly one thousand knitwear units in Tirupur gasping for breath.

Despite the Centre’s announcements about various financial packages as part of the Atmanirbhar schemes for the resuscitation of the gloomy industrial sector in the State, the knitwear exporters are yet to come out of the abyss to which they have fallen since the breaking out of the pandemic all over the world. The textile materials manufactured in Tirupur stand out in the global market because of quality and craftmanship. But that has not been successful in reviving the  cash liquidity faced by the European end users of Tirupur’s knitwear products, according to Raja M Shanmugham, president, Tirupur Exporters’ Association (TEA).

Shanmugham, a real Raja of the knitwear industry, says the fortunes of the industry could be turned for the better by a few measures which could be ordered by Nirmala Sitaraman, the country’s finance minister. “The  second  lockdown  promulgated  in  major  countries  like  Germany, France and UK from November, has lead us, mainly MSMEs  into a liquidity crisis. In addition to this we are facing another shock in the form of ever increasing price of yarn, our important raw material due to business dynamics. These factors have eroded the competitiveness of the knitwear industry,” Shanmugham, known for his fighting spirits, told The Pioneer with uncertainty written all over his face.

He said measures like Interest Equalisation Scheme which was announced for a brief period of three months , if extended to a period of two years would help in soothing the pain being suffered by the industry. “This will help us to tide over the financial crunch we are facing due to lock down and high yarn prices and also in sustaining the global competitiveness of Brand Tirupur,” said the TEA president.

The TEA in a memorandum to the minister has pointed out that the Remission of Duties and Taxes on Export Products (RODTEP) announced in January 2021 to replace the ROSCTL (Rebate of State and Central Taxes and Levies) has not been operationalised which has put the exporters and MSMEs between deep sea and devil.

“The MSMEs are not receiving  the  reimbursement  of  the embedded  taxes  including  electricity  tax, Mandi tax, GST on petro-products. The non-disbursement of RODTEP is causing severe liquidity crisis,” said the TEA plea.

Raja Shanmugham pointed out that the Centre has  extended  ECLGS  3.0 to  Hospitality and Tourism  sectors  by providing  40 per cent of  credit  outstanding  on  28.2.2021.  “Being  a  labour  intensive sector and still undergoing a financial stress, we request the Government  to extend  the  ECLGS  to  apparel  sector  also  by  providing  additional  20 per cent  credit outstanding as like given to other sectors and help us to ease the liquidity crisis,” said Shanmughham.

Tirupur employs more than 6,00,000 workers in its knitwear units and earns Rs 200 billion every year by way of exports.

Published On : 17-04-2021

Source : Daily Pioneer

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