Repo Rate Hike Will Hit Knitwear Sector – FIEO

Tirupur: The Federation of Indian Export Organisation, Southern region said that the RBI’s repo rate hike was on expected lines given the inflation outlook while Knitwear exporters in Tirupur expressed concern that the increase in cost of credit would impact the sector.Tirupur: The Federation of Indian Export Organisation, Southern region said that the RBI’s repo rate hike was on expected lines given the inflation outlook while Knitwear exporters in Tirupur expressed concern that the increase in cost of credit would impact the sector.

The FIEO’s southern region said pointed out the tight liquidity conditions faced by the export sector especially, by the MSME, and requested the RBI Governor to bring export credit under priority lending category immediately.

The unfavourable condition in their major markets, tough competition from neighbouring countries coupled with higher interest cost and deficiency in dispensation of working capital requirement of the exporters strongly argue for the need for placing Export Finance under priority sector lending.

The Tirupur Exporters’ Association said that the increase in cost of credit would make the export units “un-competitive” and would impact the knitwear garment exports. The sector was already struggling due to the price pressure in overseas market.