CHENNAI: Even as the gloom pervading the Tirupur knitwear units in the state is yet to clear out despite the varied concessions by the Centre earlier, the textile exporters are chalking out a fresh demand for another stimulus package for the sector. This would be presented to the new Union Government that takes over the country’s reigns post poll counting.
Some of the sops that are expected to figure in the wish list would include increase of duty drawback for exporters by another 5 per cent.
At present it is around 7 per cent. A five-year income tax holiday would be another demand.
Duty drawback is the concession provided on customs and excise duties for inputs used in making textiles for the export market.
The Rs 9,500 crore Tirupur textile sector is still recovering from the ‘no growth’ witnessed during 2008-09.
“Power cuts, high manufacturing and transaction costs due to the economic downturn have afflicted the sector. But instead of layoffs, the Tirupur textile sector reduced the working days from 6 to 4 and cut down on the working hours from 10 to 5 per day,” A Sakthivel, President of the Tirupur Exporters Association and the Federation of Indian Export Organisations told Express.
In 2009-10, the sector expects a further 6 per cent downslide in fortunes, admitted Sakthivel, as enquiries from buyers are yet to be converted into orders. The sector is also bogged down by short prices for its knitwear garments from buyers.
Plans are afoot to diversify into new markets of New Zealand, Australia and South America from the traditional US and European strongholds to offset the losses.
However, still worse off are the apparel and handloom exporters in the state who experienced a downslide of 30 per cent in their business last fiscal and expect another 10 per cent dip in FY’10.
“It’s a dying industry. We are looking at opportunities of diversifying into other sectors like electronics, automotives and realty using our existing resources,” said Prakash C Sacheti, Vice President of the Apparel and Handloom Exporters Association.
Decline has affected the industry since the quota regime was discontinued in 2004. Thereafter, the epicenter of business shifted to China.
Unable to compete with the high volumes and lower prices of Chinese fabrics and Bangla Desh apparel, Indian exports nose-dived.
Moreover, the industry found it difficult to foot the annual salary hike of 15 per cent for its labour.