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The Southern India Mills’ Association

Committed to Foster the Growth of the Textile Industry

Repo rate hike will hit Knitwear sector: Exporters

The Federation of Indian Export Organisation, Southern region, today said the RBI’s repo rate hike was on expected lines given the inflation outlook while Knitwear exporters in Tirupur expressed concern that the increase in cost of credit would impact the sector.
The FIEO’s southern region Chairman A Sakthivel, however, pointed out the tight liquidity conditions faced by the export sector especially, by the MSME, and requested the RBI Governor to bring export credit under priority lending category immediately.
“The unfavourable condition in our major markets, tough competition from neighbouring countries coupled with higher interest cost and deficiency in dispensation of working capital requirement of the exporters strongly argue for the need for placing Export Finance under priority sector lending,” he said in a release.
Tirupur Exporters’ Association President Raja Shanmugham said the increase in cost of credit would make the export units “un-competitive” and would impact the knitwear garment exports.
In a statement, he said the sector was already struggling due to the price pressure in overseas market.
Real estate major House of Hiranandani said the rate hike was on “expected lines” and added it would impact the revival of the sector.
“Construction activity had started to pick up slowly but the rise will hurt consumer sentiment”, Chairman and Managing Director of the company Surendra Hiranandani said in a release.
The RBI today raised its interest rate by 25 basis points on inflationary concerns for the second time in two months.