`Knitwear exporters of Tirupur incur heavy loss'
TIRUPUR: Tirupur Exporters' Association (TEA) has appealed to the Centre to reduce packing credit by three per cent to exporters following the continuous upward movement of rupee.
In a memorandum to Union Finance Minister P. Chidambaram, TEA president A. Sakthivel noted that knitwear exporters of Tirupur were incurring heavy loss owing to strengthening of rupee by 14 per cent against the US dollar. Garment exports from Tirupur during the financial year 2006-07 was Rs. 11,000 crore. Mr Sakthivel said despite the growth of 25 per cent the exporters were worried over this development.
He said the continuance upward movement of rupee would result in losing their orders. "As China, our main competitor in the global market, is pegging their currency against dollar, it is impossible for us to compete with them and stay in the market," he added.
Plea to Finance Minister
Mr. Sakthivel asked the Minister to advice the Reserve Bank of India (RBI) to intervene in the forex market immediately.
The interest rate, including the packing credit, had gone up recently further to measures taken by RBI to control inflation.
He appealed to the Minister to reduce the packing credit interest rates offered to exporters by three per cent from the existing rates.
Mr. Sakthivel said their orders were booked already and the buyers would not accept the position by giving compensation for the adverse effect on the rupee currency.