TIRUPPUR: Even as buyers in the United States have started holding orders that have been placed, exporters from Tiruppur met Chief Minister MK Stalin and submitted a host of requests, including special emergency credit facility and a moratorium on bank loan repayments.
US President Donald Trump announced a 50 % tariff on goods exported from India to the US from August 27.
Exporters are concerned that this tax burden will affect businesses in Tiruppur as knitwear export from Tiruppur to the US is worth Rs 2,000 crore. In total, trade for the previous financial year amounted to Rs 44,747 crore, of which nearly 35 % was exported to the US.
Exporters expressed hope that the central government will bring back the tax burden to normal levels. They are also considering alternative arrangements to deal with this impact.
In this context, Chief Minister MK Stalin met with representatives from various exporters' associations across the state on Thursday, to understand the probable impact on the export industry.
During this meeting, a few important demands were placed before the chief minister on behalf of the Tiruppur Exporters' Association (TEA).
N Thirukkumaran, general secretary of TEA said "Industrial knitwear companies in Tiruppur will be affected by the tax announcement. Although the impact isn’t seen yet, US buyers have requested our exporters to hold previously placed orders are they are unwilling to import knitwear after paying high duty fees. If this situation continues, many companies will shut shop, leading to job loss.”
"We are seeking alternatives to avoid the impact of this development. People from various industries are feeling the heat. We have put forward some requests to the chief minister and urged him to pressurise the central government. In particular, we have sought a two-year moratorium for MSME exporters on repayment of principal amounts of bank loans, provision of special emergency credit facility for exporters and subsidies to develop infrastructure for accessing alternative markets to offset US business losses. We have also sought to reinstate the 5 % interest subvention scheme that was available until December last year. Separate banking policies for MSMEs, along with liberalised import policies to facilitate greater garment production using synthetic yarn must be taken up," he added.
Kumar Duraiswamy, joint secretary of TEA, in a social media post, said, "Tiruppur, an industrial city with 10 lakh workers, 2,500 companies, and 20,000 dependent companies, will be severely affected by this tariff. Many companies are not only losing significant business opportunities, but are also facing difficulties in shipping goods that have already been readied. Additionally, the need to offer heavy discounts in such situations may result in considerable losses, potentially destabilising the operations of these businesses."
"During the meeting, the Chief Minister told us that he would take steps on our requests," he added.