Hit by the Chinese yuan devaluation for the third consecutive day, the textile industry has urged the Centre to announce an interest rate subvention of 3 per cent as announced in the Budget.
RK Dalmia, Chairman, Cotton Textiles Export Promotion Council (Texprocil), said that while the Chinese government has devalued its currency by 3.5 per cent to help exports that declined to 10.2 per cent in July, the Indian government has no time to implement an interest rate subvention of 3 per cent despite the Finance Ministry sanctioning the requisite fund.
Given the crisis in the textile industry, the Centre should clear all the dues of the industry under the TUF (Technology Upgradation Fund) Scheme and release additional funds, he added.
The industry, which run on a low operating margin, has sought government intervention to tide over global recession and intense competition, he said.
In fact, Dalmia said, the situation has worsened to such an extent that spinning mills in the North and South are contemplating a shutdown, which may lead to lay-offs and job losses.
“The Chinese government appears to be more sensitive to the decline in their exports than our government, as they had acted with alacrity to arrest the decline in their exports by taking steps swiftly to devalue their currency,” he said.
Cotton textile exports were almost flat in the June quarter at $2.49 billion (₹15,930 crore), against $2.48 billion (₹15,870 crore) achieved in the same period last year.
Exports hitThe devaluation of the Chinese currency will hit textile exports further as their products will become much cheaper than shipments from India.
Textiles and clothing exports are already facing sluggish growth due to recessionary conditions in the global markets.