Spinners appeal to announce interest subvention scheme

COIMBATORE: Indian Texpreneurs Federation (ITF), a body of spinning mills, today appealed to the Centre to announce interest subvention scheme for yarns and clothes exports, since interest cost was the deterrent factor for the profitability.

In a letter to Union Commerce Minister Nirmala Seetharaman, ITF Secretary Prabu Damodaran said most of the small and medium sized mills were expected to make losses at the net level in 2015 fiscal and also 2016 level.

Quoting CRISIL interim report recently submitted to the minister, Prabu said that the downward trend was continuing, which has significant ill effects on the mills like high piling of stocks due to fall in demand and financial crisis due to fall in exports.

Stating that existing orders were undergoing re-negotiations due to devaluation of Yuan, he said that this also affected the farm sector due to delay in payment for cotton purchased by the mills.

The interest subvention will give a thrust to yarn and clothe exports due to competitive pricing and the gap created by this would be filled by domestic supply and lead to benefit the suffering sector very directly, Prabu said.