Knitwear exporting units in Tirupur are in a tight spot. While there is no dearth in the flow of orders, the stoppage of duty drawback rates since beginning of December, they fear, would derail their production plans.
Tirupur Exporters' Association President A Sakthivel says that the owings to this knitwear export cluster alone would be around Rs 210 cr. “Our monthly exports is around Rs 3000 cr. The duty drawback rate is 7 per cent of this turnover,” he explained.
Based on complaints received from its members, TEA has taken up the issue with the revenue secretary in the finance ministry seeking immediate intervention and quick resolve.
The units, according to Sakthivel depend to a large extent on the refund to procure raw material and accessories and executing the orders.
“The delay/ stoppage of duty drawback rates has started impacting the production schedule of quite a number of units. Our operating margins are thin,” Sakthivel pointed out, adding “unreliable delivery schedules would drive the foreign buyers to competing countries to source their requirement. If this happens then it would be difficult to bring them back.”
He has appealed to the secretary to advice the customs department to clear the pending duty drawback rates on priority basis and support for sustained growth of Tirupur exports.