Garment Ind expects continuation of 2% interest subvention on pre-shipment export credit

Indian Apparel Industry has requested the Finance Ministry to continue with 2% interest subvention on pre-shipment export credit, which it considers to be the boon to apparel sector.

In the last Union Budget, the Government had provided Interest Subvention of 2 per cent on pre-shipment export credit up to March 31, 2010 for exports in certain sectors. But the sector-specific subvention available to garments had been discontinued. It was further specified that apparel manufacturers falling under SME category only could avail of the said subvention. According to the RBI Notification (RBI/2010-11/165), the benefit had been restricted to four items only (at 8-digit HS category) leaving out many major categories. All this had largely restricted garment exports.

Said Mr Premal Udani, chairman, Apparel Export Promotion Council, “The issue has been very sensitive for the growth of garment sector. As the Notification has been restricting garment exports, we have been pursuing the issue with Department of Banking Operations & Development (DBOD) of RBI and Ministry of Finance. We expect the Ministry of Finance to issue a proper clarification pertaining to Chapter 61 & 62 (Readymade garments covered for the scheme of Rupee Credit Interest Rate Subvention of 2%). As we understand that the said subvention is up to March 31, 2011 only, we want the scheme to be extended for the period 2011-12 and the benefit be given across apparel export industry.”

AEPC believes that as the benefit of the current scheme has been applicable to four items of apparel only (at 8-digit HS category), if extended, the benefit could be enjoyed by the entire garment industry. Accordingly, in light of the same, AEPC has requested Ministry of Commerce to take up the matter to Ministry of Finance for immediate issuance of clarifications and extension of 2% interest subvention up to March 2012.

About AEPC:
Incorporated in 1978, Apparel Export Promotion Council (AEPC) is the official body of garment exporters that provides invaluable assistance to Indian exporters as well as importers/international buyers who choose India as their preferred sourcing destination for garments.  With 40 offices and 8,000 small, medium and large garment exporters across India, AEPC today has grown to become the most powerful association for promotion and facilitation of garment manufacturing and exports.  With an objective of building a strong ground for the Indian exporters, AEPC is committed to provide various platforms to Indian exporters which would help in achieving growth of garment exports.