The Hindu Business Line : Tirupur exporters highlight issues affecting growth

Coimbatore, Feb. 21 Tirupur knitwear exporters have highlighted the loose ends in fiscal, infrastructure and labour issues having a bearing on the viability of readymade garment exports. They wanted support from the Union Commerce Ministry to set right the issues so that the export growth momentum of the sector is kept.

In a memorandum submitted to the members of the Parliamentary Standing Committee on commerce who visited Tirupur on Wednesday, the Tirupur Exporters Association (TEA) has stated that after posting 15 per cent export growth for two consecutive years, the export from the region this year showed a 10 per cent negative growth. Blaming the decelerated exports on the sliding dollar value on account of 14 per cent appreciation in rupee, the TEA members apprehended the declining export trend for the coming year.

Fiscal corrections

To overcome this, the knitwear exporters wanted the committee to impress upon the Centre to implement fiscal corrections in the form of extending exemptions from payment of fringe benefit tax and service tax for garment exporters, besides revising the duty drawback rates upward from the present 11-14 per cent to compensate the rupee appreciation.

They pointed out that exporters are keen to hedge the currency exchange risk, but it comes at a cost of posing an additional burden to the shippers and needs to be compensated. Alternatively, the Centre could come out with a dual exchange rate for exporters by pegging rupee at a point against dollar.

The TEA memorandum sought revamp of labour legislation and suggested that the national rural employment guarantee scheme, with a minimum 100 days of assured job, be extended to the sector. With some modification on minimum days of employment and the daily wages, the garment sector would be in a position to absorb 6 million people. The knitwear industry sought the support of the committee to get the Centre’s nod for this.

Required infrastructure

On the infrastructure required by the garment and textile industries in Tamil Nadu, the TEA memorandum said the association has, with the Tamilnadu Water Investment Company Ltd, set up a special purpose vehicle company, Textile Eco Solution Tamilnadu Ltd. This company has proposed to take up the Rs 1,000 crore scheme to implement marine discharge of effluents from the textile producing clusters including Tirupur and Karur. It urged the committee to take up, with the Centre, the need to meet 50 per cent of the project cost, as the Ministry of Textiles scheme on policy resolution for textile infrastructure development fund and textile territorial investment and production complex provides a 50 per cent grant.

The memorandum also had sought the widening of the national highway No 47 into a four-lane between Chengampally upto Valayar check-post, as the current plan of four-laning this highway is limited up to Chengampally. The four laning would facilitate removing the bottlenecks in operating container laden trucks. Similarly the TEA had also sought the widening of the road between Tirupur and Tuticorin to enhance the cargo movement between knitwear city and the port town.

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