The Tirupur Exporters’ Association (TEA) today said the Reserve Bank of India’s decision to keep the repo rate unchanged at 6.25 per cent has disappointed the exporting community, which was expecting a reduction in interest rate, post demonetisation.
The reduction in interest rate is the most important at this juncture to increase the competitiveness of apparel sector at a time when the export growth rate is a meagre 3.54 per cent for the nine months period of this fiscal year 2016 -17, TEA president, Raja M Shanmugham said in a statement.
“The sixth bi-monthly Monetary Policy statement for the year 2016-17 today announced that it has maintained the repo rate at 6.25 per cent, which is disappointing to the exporting community,” he said.
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In the Economic Survey 2016-17, first time a chapter was allocated to apparel, leather and footwear considering their contribution to the economy, exports and employment and added that the growth of this employment intensive sector could be possible only when they get borrowings at lower rate, he pointed out.
Shanmugham further said that it was the right time for the knitwear sector to capture the market leaving from China, due to increase in cost of manufacturing and specifically noted “once we miss the bus, those market will be dented by our competing countries like Bangladesh, Vietnam, Indonesia and Cambodia.”
He expressed hope that the Monetary Policy Committee, RBI would consider the industry’s request in the first bi monthly policy next year and that it would be impetus for the sector.