The US government move to withdraw GSP (Generalized System of Preferences) benefits to India from last Thursday will impact export of handloom made home textiles products. Among the home textiles that would face the heat include products made of silk, jute and specialised products such as wall hangings, banners and national flags.
National flags predominantly manufactured and exported by SME sector account for the largest of exported item at Rs 466 crore ($64 million).
Ujwal Lahoti, Chairman, Textile Export Promotion Council told BusinessLine that India is the single largest country in the world with the highest number of handlooms and it would be impossible to source these products in required quantity from other countries. Concessional tariff under GSP, benefits the US consumers as much as it benefits Indian exporters, he added. Handloom fabrics, floor covering and silk products are manufactured by cottage industry in rural India thereby providing employment to a large number of female workers helping in poverty alleviation and sustainable development of small clusters. Premature withdrawal of GSP benefit will cast a financial burden on both the Indian manufacturers and the US retailers, said Lahoti.
Meanwhile, the interest subvention on pre- and post-shipment finance for exports by MSMEs to 5 per cent from 3 per cent and sanction of loan up to Rs 1 crore to GST-registered MSMEs would boost their confidence. Lahoti said it will provide a much needed support and encouragement to the MSME sector which contributes significantly to the textiles exports. A web portal has been launched through which MSMEs can avail of loans up to Rs 1 crore from Small Industries Development Bank, SBI, Bank of Baroda, PNB, Vijaya Bank and Indian Bank.
The MSME sector accounts for about 45 per cent of manufacturing output and about 40 per cent of total exports. One of the problems for MSMEs is getting bank finances as majority of them are from informal sector and find it extremely difficult to raise funds for their business activities as credit appraisal is a major challenge, he said.